The sentiment surrounding Bitcoin suddenly changed on April 1 as its prices rallied by a massive ~23% in a day and the bear market was history after this point. Bitcoin’s price has been creating higher highs ever since this point.
The price of Bitcoin, at press time, was $8,736 and the market dominance of Bitcoin was 56%. The price had a net positive change in the last 24 hours.
The Bitcoin community has now split into two factions; one which believes that the crypto-winter has ended, and that the bull run has started. The other faction believes that the price of Bitcoin rose too dramatically and hence, expect and correction to $4,000 to $6,000, which will replenish the momentum of the rally. Only after this correction, will the bull rally begin, according to the second faction. Peter Brandt, and Tone Vays are few prominent personalities who belong to the second category.
So which faction will win this cold war? There are two possibilities favoring each of the factions as seen below:
The Rising Wedge
The Rising Wedge formation as seen in the chart below shows the price forming a higher high and higher low, which is being consolidated into the mentioned pattern. The breakout of this pattern will be bearish, hence the second faction that believes in the correction will be satisfied, partially.
In addition, there is a parabolic resistance that is acting as a support to the price, which also coincides with the end of the rising wedge, thus indicating a breakout from the pattern. Moreover, the prices in the rising wedge are also being supported by a parabolic resistance as seen in the chart above.
The breakout, if the pattern confirms, will be anywhere between $8,400 to $7,900 and $6,600 to $6,100, which is also confirmed by the volume profile indicator.
Since the identification of patterns is subjective, the pattern above can also be viewed as an Ascending Channel, instead of a Rising Wedge.
As seen on the above chart, the last time the price broke out of an ascending channel was in mid-May 2019, and this breakout led to the start of a parabolic rally, which pushed the price of bitcoin from $5,900 to $8,300 in only a couple of days. Since the current set-up looks fairly similar to the previous pattern, and the upper line of the ascending channel is acting as a resistance, breaking it might push the prices to perform another parabolic move. This move would not be surprising since it would be in a bull market.
However, if the rise continues, then the next target for Bitcoin will be between $10,200 and $11,400, which is an approximate 20% increase by the end of June 2019.
Although a correction seems logical for the start of a bull rally, it seems a little too far-fetched. Since a lot of the people are under the belief that this is the bull run, the price would continue to keep moving higher since Bitcoin doesn’t quite follow the logic.
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Akash is your usual Mechie with an unusual interest in cryptos and day trading, ergo, a full-time journalist at AMBCrypto. Holds XRP due to peer pressure but otherwise found day trading with what little capital that he owns.