Bitcoin still maintains the bullish structure that has existed since the beginning of the year. It is likely to break the $31,000 resistance area without any major correction.
After hitting a low of $15,400 in June 2022, Bitcoin started to rise and formed the right shoulder of a head and shoulders (H&S) pattern. This is a bullish formation that usually results in a trend reversal to the upside.
In fact, the price broke out of the pattern for the week of March 13-20, 2023 with a large white candlestick, signaling the formation of a long-term bottom. The technical pattern has a price target of $35,000, calculated by connecting the pattern’s height to the breakout point.
BTC/USDT Weekly Chart | Source: TradingView
Despite being rejected by the $31,000 resistance area on the way up and forming a bearish engulfing candle on the weekly chart, the bears failed to capitalize on this to push the price lower.
This was especially evident as Bitcoin created a large bullish candle the following week with even more volume than the engulfing bearish candle. It shows strong buying by bulls during minor corrections.
Therefore, BTC price is likely to break the $31,000 resistance area without any major correction.
The weekly RSI supports this possibility as it makes higher lows and approaches overbought territory.
Also, the H&S reversal pattern has been around for 280 days, so the lack of a major correction immediately after completion is something to consider.
ascending triangle pattern
After rebounding from $31,000, BTC price formed an ascending triangle with resistance at $30,000 and support near $28,200. This is a bullish pattern that usually leads to a breakout in most cases.
The 4-hour RSI favors a breakout as it has breached its own descending resistance line. Such breakouts in the RSI usually precede breakouts in price action.
Therefore, there is a good chance that BTC price will break out of the triangle in the coming days.
As mentioned above, this would set the stage for a break above the long-term resistance area of $31,000.
BTC/USDT 4-hour chart | Source: TradingView
The most likely scenario suggests that the Bitcoin price will break out of the current pattern and then the $31,000 resistance area.
If so, the next target would be $35,000.
This view could be affected if there is a break below the support line of the ascending triangle at $28,200.
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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