According to cryptocurrency traders, the Bitcoin (BTC) price could see a massive rally and enter price discovery if a bullish chart pattern known as a descending expanding triangle is confirmed.
“#Bitcoin is moving within a descending extending triangle,” cryptocurrency post trader Tardigrade explained in a post on the X social media platform on August 12.
The analyst noted Bitcoin’s price action since the beginning of the year, which has been seen on the two-week chart, has formed a wide descending wedge pattern.
A descending expanding wedge is a technical chart pattern that occurs during a downtrend and is characterized by two diverging lines connecting a series of lower highs and lower lows. A clear break above the wedge’s resistance confirms a bullish breakout.
“This is the same pattern that $BTC has been following in 2019-2020,” he declared.
Bitcoin price broke out of this pattern in 2020, surging 580% to reach an all-time high of around $69,000 in 2021.
“As this pattern broke, $BTC rose from $10,000 to $70,000.”
Bitcoin price bounced strongly from the support of the prevailing chart pattern near $53,500 during the week ending August 9, and if the pattern continues as suggested by Trader Tardigrade’s model, a bullish breakout will be confirmed by breaking the $69,000 barrier, which is a key resistance level.
Fellow analyst Matthew Hyland also noted that BTC/USD “formed a structure similar to what we saw heading into Q4 last year, and also in election years (2012, 2016, 2020).”
Hyland explained that Bitcoin “found its bottom” each year before entering a sustained uptrend heading into Q4.
Accordingly, Hyland believes that the recent Bitcoin price crash below $50,000 represents the bottom for Bitcoin in this cycle.
In a previous post on X, Hyland shared a chart showing last week’s candlestick having its longest and lowest wick, indicating that the pioneering cryptocurrency may be bottoming.
Independent trader Roman called the weekly close a bullish divergence, adding that it was only a matter of time before prices entered a sustained uptrend.
Despite this positive outlook, the fear and greed index shows that buyer interest in the cryptocurrency market is lower than during the FTX crash.
The index currently sits at 25, indicating “extreme fear,” a significant drop from the previous day’s reading of 39, indicating “fear.”
Meanwhile, some traders expect Bitcoin prices to remain stagnant in the short term, but do not necessarily see this as a bearish signal.
“Overall, the price is still consolidating above its all-time high. If LTF breaks below support, it could get stuck before the price pumps again,” independent trader Mags added.
“Limited receiving is likely to continue for a few more days. #Bitcoin is back at key support after being rejected mid-channel,” crypto trader Daan Crypto Traders told his followers in an August 11 post.
“We need to form a higher low here, otherwise the bulls will be in trouble.”
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.