Bitcoin has confirmed a long-term bullish reversal pattern. may continue to increase in the short term. The US Federal Reserve’s balance sheet expanded by $297 billion this week to $8.63 trillion. The surge prompted the Crypto Twitter community to say that the world’s most powerful central bank has restarted its “quantitative easing (QE)” campaign.
head and shoulders pattern
After reaching an all-time high of $69,000 in September 2021, Bitcoin began a long-term downtrend. This movement resulted in a price as low as $15,400 in June 2022 before recovering again.
The bounce helped price complete the right shoulder of an inverse head and shoulders pattern. This is a bullish formation that usually results in a trend reversal to the upside.
In fact, the price broke out of the March 17, 2023 pattern with a large white candlestick, signaling the continuation of the uptrend. The technical pattern has a price target of $35,000, calculated by connecting the pattern’s height to the breakout point.
On the way towards this target, there is minor resistance at $28,000 and $32,000. However, these levels can be conquered as BTC just broke out of a 9-month-old ratchet formation.
The RSI supports this view as it quickly recovered from oversold to overbought territory, indicating a very strong bullish impulse.
BTC/USDT daily chart | Source: TradingView
short term correction
After a strong rally from the $20,000 region on March 10, Bitcoin has reached an ascending resistance line that has been in place since January 21. This line has rejected the price many times, so Bitcoin is likely to be rejected again.
Moreover, the RSI is forming a bearish divergence on the 4-hour chart, favoring a correction.
If so, Bitcoin could correct to the $25.8k-$26.2k area formed by the previous top and the 0.382-0.5 Fib retracement support area of the recent rally.
BTC/USDT 4-hour chart | Source: TradingView
Overall, the most likely outlook is that Bitcoin will continue to rally towards the pattern’s target of $35,000. However, the price may correct towards the $25,800-$26,200 region before continuing higher.
A break above the March 17 high of $27.7k will resume the uptrend.
You can see the token price here.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should do their research carefully before making a decision. We are not responsible for your investment decisions.
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According to AzcoinNews
