Bitcoin (BTC) appears to be challenging record highs after the low-key Federal Reserve meeting this week.
However, an expert cautions based on his observation of the price charts as Bitcoin rose from lows near $ 43,000 earlier this month. The chart pattern has taken the form of what is known as a rising wedge, a sign of fatigue in an upward trend.
“My concern is growing that we could encounter a rising wedge scenario,” said Patrick Heusser, trading director of Crypto Finance AG, based in Switzerland, CoinDesk in a telegram chat. The wedge’s support line is pretty strong with more than four points of contact, but that gives me some confidence as we break the trendline deeper when it could get ugly. “
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The rising wedge consists of converging trend lines connecting higher lows and higher highs. The converging nature of the trendline shows that the upward momentum is fading. Hence, a breakdown – a move below the bottom of the rising wedge – is viewed as a sign of a trend change from bullish to bearish.
Moving below $ 54,000, Heusser said, would confirm the rise in the rising wedge and open the doors for a decline to $ 47,000. The immediate bias remains bullish while the wedge support is kept intact.
At press time, Bitcoin is changing hands near $ 58,900 after hitting lows below $ 56,500 early Friday, according to CoinDesk 20 data.
The cryptocurrency surged from $ 55,000 to $ 60,000 earlier this week after the Fed did not signal a rate hike until at least 2024, countering growing fears of an early unwinding of monetary stimulus.
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Some analysts say the Fed’s cautious tone has set the cryptocurrency on its way to new record highs above $ 62,000. Patrick expressed a similar opinion and pointed to the rising wedge.
The story goes on
“On the whole, I don’t see any change. We’re still in a bullish scenario, but the consolidation phase will take a little longer and that’s not a bad thing, ”said Heusser.