Bitcoin just completed a triangle pattern after dropping to $6500. Will there be a bullish breakout leading to $7000?
Triangle pattern is one of the most used technical chart patterns by market chartists. Often times, price continues in the direction of the trend before the formation of the triangle. Triangles also require a significant price breakout. Price often follows in the direction of the breakout. The drop to $6500 has seen the price chart of Bitcoin completed a triangle pattern. Where will BTCUSD break out – upside or downside? Upside is more likely considering the current optimism among big Investors. Currently, price is close to $6600 gaining about $90 in the last 8 hours.
BTCUSD Technical Overview and Important Price Levels
In the last update, an incomplete triangle pattern was spotted. The pattern required the last leg (bearish) to complete. According to Elliott wave theory, triangle patterns often have 5 legs labelled a to e. The chart below was used in the last update.
Between 6800 and 6450, a triangle pattern is forming. If this pattern completes, price will have a big chance to break upside toward 7000 to complete the bullish correction from 6100. At the end, price is expected to fall further. If the current optimism in the market is real, a surge above $7400 should happen. A break above 7400 will confirm the optimism and will likely be followed by a move toward 10000. From technical perspective, a break above 7400 is not very much likely. What’s is more likely is a triangle breakout toward 7000 and a fast drop thereafter.
Price moved exactly as expected to complete the triangle pattern. A rally to 6750 followed by a dip to 6500 to complete wave d and e. Here is the new update showing the 5 legs (waves) completed.
The chart above shows a sideway triangle pattern which started 22nd September and completed the last leg today. This pattern will be valid if price rallies to break out of the b-d triangle resistance line. If a breakout happens, price has a high likelihood of hitting $7000 or above. Lack of bullish momentum might lead to further drops toward $6350 and $6100. We could also see more sideways move between 6500-6600 for few more days before the eventual breakout. If price breaks downside, further decline below 6300 is high.
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