By CCN: The minor bitcoin price rally which Bloomberg initially rejected as an April Fools’ joke has metamorphosized into a laughter riot.
The world’s leading cryptocurrency has surged as much as 116.29% since its first notable breakout action of April 2. It established a fresh yearly high $8,947.88 this Monday in what now appears like a tireless bull run. There have been no signs of extreme pullbacks despite bitcoin’s overbought status. And every minor downside correction is influencing more speculators to enter the bitcoin market at a slightly lower intraday rate.
The Giant Falling Wedge
The ongoing bitcoin price rally also brought attention to a giant falling wedge formation that started in February 2018 and ended in April 2019, as shown in the chart below:
A falling wedge is typically a bullish indicator with a 62% success rate when it comes to meeting upside targets. The pattern is confirmed if an asset’s price moves in a downward trajectory while fluctuating between two converging trendlines. The lower trendline behaves as a support, while the upper trendline acts as a resistance. The price keeps bouncing between the two unless it reaches the apex of the falling wedge. It then breaks above the resistance trendline – accompanied by a rise in volume – to retest the highest peak of the pattern, known as the breakout target.
The bitcoin price action has orderly followed those textbook requirements. As shown in the chart, the price moved within the parameters defined by the two converging trendlines in red. While [B] appeared as the pattern’s highest peak, [H] is where the bitcoin price attempted to break above the wedge resistance (confirmed on April 2). After that, the cryptocurrency continued its upside run and broke many crucial resistance levels such as [G] and [F].
Bitcoin has now come closer to breaking above [D], which coincides with $9,948.12. But the cryptocurrency’s ultimate goal, at this point, is to retest [B], which is lurking anywhere between $11,238.48 and $11,779.67.
Given how the rising wedge pattern has held this far, it should not be surprising if the bitcoin price achieves the $11,779 target in the medium-term.
Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.