Bitcoin crashed down to $25,000 last week, but swiftly rebounded in a huge pump following this false breakdown. At first, it appeared Bitcoin was continuing its downtrend as it broke down below the head and shoulders pattern. However, a massive buyer suddenly stepped in to send Bitcoin surging to the upside.
According to a technical analyst on TradingView, this price action indicates strong demand below $25,000. Bitcoin quickly rejected lower prices, showing the bears were unable to push it below key support. This rejection suggests a potential trend reversal may be forming.
The recent Bitcoin price action also exhibits a triple three corrective pattern (WXYXZ), according to Elliott Wave theory. Corrective waves indicate a prior trend is losing momentum and the market is shifting from selling to buying. The triple three is a particularly strong corrective formation that marks the end of bearish sentiment.
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Show more +In addition, Bitcoin seems to be building an ascending triangle base, with higher lows and resistance around $31,000. This type of triangle pattern tends to break out upwards.
While the crypto markets remain unpredictable, these positive technical developments hint Bitcoin may have put in a significant bottom. Analysts advise cautious optimism and prudent risk management. But the data tentatively suggests Bitcoin bulls could soon regain control, presenting opportunities on the long side.
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