Bitcoin (Bitcoin) The latest rebound from below $30,000 increases the possibility that it will continue to rise, at least according to a classic technical model.
Known as the expansion pattern, when the price moves within two different trend lines, a megaphone-shaped pattern appears.Investment Encyclopedia state The expanded form represents investors’ disagreement on the next potential bias. As a result, prices have formed higher mid-term peaks and lower mid-term lows.
Bitcoin appears to be traded within a similar structure, as shown in the figure below. Nevertheless, the lack of volatility of cryptocurrencies is one of the key features of the expansion formation model.
If this pattern emerges, Bitcoin price will see a bullish break above the upper trend line of the structure.
In doing so, it is expected to rise to the maximum height between the upper and lower trend lines of the expanding pattern. The upside setting occurs because traders interpret the expanded pattern as a trend reversal pattern.
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But before that, this model provided day traders with swing trading opportunities, that is, a rebound from the lower trend line often brings long opportunities for the upper trend line, and a pullback from the upper trend line may cause traders to move to the lower trend line. Open a short position.
Similarly, Bitcoin price volatility is low enough to invalidate this range.
The biggest temporary resistance is near the dotted trend line in the Bitcoin chart below.
Closing above the dashed trend line expects Bitcoin to test $35,00 as its next resistance target. According to the recent price pattern of cryptocurrency, if it goes higher, it may reach $40,000.
Conversely, a pullback from the dashed trend line tends to verify the downward channel pattern. On the other hand, Bitcoin may fall back to the so-called expanded wedge support trend line (the next downside target is close to $28,500).
Bitcoin price fundamentals
As the bulls continue to defend the $30,000 as support and the bears control the $34,000-35,000 area, conflicting Bitcoin settings have emerged.Unfortunately, this has reduced the BTC price to Limited trading range, Gave no temporary clues as to where it is going next.
Fundamentals have played a key role in limiting the price of Bitcoin. On the bright side, inflationary pressures from the traditional financial sector provide a tailwind for Bitcoin’s safe-haven narrative. At the same time, the downside is that global regulatory dissatisfaction with the cryptocurrency field is increasing.
In the past two months, the market has witnessed China’s ban on cryptocurrency trading, India’s raid on regional cryptocurrency exchange WazirX, and the United Kingdom Ban Binance’s subsidiaries From operating a regulated business.In addition, Japan and Hong Kong Also issued a warning And restrictions on Binance.
Earlier this week, US state authorities Close the account of the crypto company BlockFi, Claiming that the start-up company sold unregistered securities. The industry has also been criticized for increasing its carbon footprint through mining, which requires a lot of computing power to run the blockchain.
“As long as the global regulation of cryptocurrencies is not relaxed or a resolution is reached, I think it will be difficult to gain public trust, and it will be difficult for Bitcoin to reach the heights reached in early 2021,” said founder and CEO Adam Todd. Digitex told Cointelegraph.
JG Collins, head of Stuyvesant Square Consultancy, also wrote In his Seeking Alpha column, “National economic regulators, state environmental regulators, and municipalities troubled by “mining” raising local electricity bills will sweep cryptocurrencies like a tsunami.”
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