Bitcoin Breaks Above 4k and Shows More Upside Potential

As more sellers leave the market, Bitcoin has been on a tear. Within the past few weeks Bitcoin has shown multiple bullish indicators. For instance, the first bullish indicator was a falling wedge pattern in which Bitcoin broke to the upside. Ever since, Bitcoin has been able to hold support at roughly 3.7k – 3.8k.

The second bullish indicator is the potential inverse head and shoulders pattern. Many have discussed this pattern since the beginning of the uptrend. If a confirmation of the inverse head and shoulders pattern is to occur, expect a target of roughly 4.5k. Currently, this trend is tentatively coming to fruition.

The third bullish confirmation is the break out of the ascending triangle at 4k. Additionally, buying volume has come back into the market which is ideal for a potential bull rally. The bulls will now have to break through the previous high of 4.2k. If price remains at 4k for a day or two, Bitcoin will have the potential to carry out a textbook bull flag formation. If 4.2k is broken, we could have an immediate retest of 4.5k, then an ultimate retest of 5k.

Although there are bullish indicators, it will be difficult for the bulls to create a new higher high. Bitcoin has not created a higher high in over a year and we are still underneath our prior higher high of 4.2k. If the bulls are rejected at 4.2k, Bitcoin will have formed a double top, which could lead to further downside. For now, indicators show that bullish momentum is likely to continue and a long position is favorable.

Disclaimer: I am not a financial advisor. This is not financial advice. Please do your research independently and make objective decisions. This article is intended to educate readers on the recent state of the cryptocurrency market. The author of the article trades cryptocurrency.

Charts are from tradingview.com