At the moment, the price of the first cryptocurrency is traded near $49,000. Trading volume fell sharply to $30 billion. All this indicates that the market was calming down yesterday.
Let’s take a look at the Bitcoin chart and see what to expect from it in the coming days:
For the last 5 days, the price of the first cryptocurrency has been near the $50,000 mark, but the bulls cannot gain a foothold above it. This indicates their weakness at the current time. Additionally, this is indicated by declining trading volumes with a significant price increase of 70%.
At the same time, a rising wedge reversal pattern has formed on the chart. Usually, it indicates that it is getting harder and harder for buyers to drive the price up. At the same time, sellers begin to strongly defend the levels along the upper border of the pattern. On this chart, that level is the $46,500 – $50,000 range.
At the moment, the chart is near the upper border of the pattern. As we said before, buyers cannot get past the $50,000 mark, which could be a signal for a decline. Now it is very likely that the price will go down to the lower border of the wedge to the level of $46,200. When this pattern is worked out, the price of the first cryptocurrency may fall to $42,000.
Also, the Bollinger average line comes to the level of $46,200, which has been a strong support level in the last 4 weeks. This line almost perfectly coincides with the lower border of the wedge, which only amplifies this signal. In case of a breakdown of the middle line, the price may head towards the lower Bollinger band, which is at $41,500.
If you look at the RSI and Stochastic indicators, you can see that they are in the overbought zone for about a month. It is a rather long period. These indicators must unload at least to the 50% level so that we can see the new price highs.
Note that the $42,000 level is a strong support level towards which the price will strive. At the same time, many signals indicate that in the event of a fall, Bitcoin will come exactly to this point, which only enhances the importance of this level. The coming decline looks extremely natural, as buyers have exhausted their strength at the moment and the initiative should go to bears in the coming weeks.