Βitcoin - BTCUSD
Bitcoin price found new buyers on the recent move lower and formed not one but two reversal patterns. On the one hand, we see a falling wedge. On the other hand, an inversed head and shoulders pattern comes to reinforce the reversal.
There is a lot of debate recently on the crypto market as the trading activity increased dramatically in 2021. For example, retail trading accounts that buy and sell cryptocurrencies increased ten times when compared to a similar period last year. If we add to this the adoption of cryptocurrencies from major institutional investors and public companies, we may say that the bullish wind behind Bitcoin is unlikely to end so easily.
In other words, buying the dip worked again, as Bitcoin is now at the $50k level. Based on what a falling wedge suggests, bulls have hopes that the cryptocurrency may make a new high above $58k.
The price action that follows a falling wedge pattern typically reverses the entire pattern in less than the time it took to form. Hence, traders should pay attention to the signs of a bullish price action, such as the series of higher highs and higher lows. So far, so good.
Bulls may want to remain on the long side targeting a new high above $58k while having a stop at the recent lows.
