The sideways trading of bitcoin led to the fact that for several days the price of the main cryptocurrency fluctuated around $ 37,000. During this time, the road was cleared to the $ 40,000 level and support was strengthened at $ 36,000.
This situation contributed to the formation of a pennant pattern, which simultaneously denotes both a reversal and a preservation of the current pattern. In the event of a resumption of the downtrend, Bitcoin may explore levels in the $ 30,000-27,000 range.
Pennant patterns are similar in structure to flags, but are characterized by converging trendlines as the asset consolidates. In this case, it is quite possible that the consolidation will last from one to three weeks.
The volume at each point of the pennant is critical. Please note that at first it should be huge, but then it weakens as the figure narrows. When the pattern matures, the pennant is confirmed by large volume, which leads to another significant price movement.
As for Bitcoin, the bearish pennant pattern is likely to end in a downward movement equal to half the length of the flagpole. Hence, traders should watch closely for the increase in volume as the price approaches the uptrend line.
Convergence of Moving Average Divergence (MACD) shows that the prevailing trend is slightly favoring the bulls. Deviation of the
MACD line from the signal line is also a bullish signal. Consequently, if the technical picture persists, Bitcoin may slowly resume its uptrend as the bulls begin to attack $ 40,000.
Daily Bitcoin levels
Spot Rate: $ 38 480
Trend: short-term bullish
Volatility: low
Support: $ 36,000 and $ 34,000
Resistance: $ 38,000 and $ 40,000
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