After the bullish action of the last few days bitcoin is either running out of steam, or the king of the cryptocurrencies is gathering for a breakout of a bullish pennant.
Having put on 29% over the last two weeks, many might think that it is time for bitcoin bulls to have a bit of a rest before pushing on further, or before allowing a decent retrace to the downside.
Bullish pennant forming
However, the charts might be suggesting that bitcoin hasn’t finished its rally quite yet. Bitcoin is holding nicely above its long term channel and for the shorter time frame a bullish pennant has been forming over the last couple of days.
Source: Trading View. 4-hour time frame.
As can be seen in the image above, the bitcoin price has respected the top and bottom edges of the pennant, and at least three touches have been made at the top and bottom. A measured move to the upside, if this is indeed where bitcoin breaks out, would see a possible move to $40,000.
At time of going to press, bitcoin has made another touch to the bottom of the bull pennant and is heading back to the top. Given that bitcoin is running out of room in the pennant, a breakout should come later today or potentially on Friday.
Momentum to come in for next week
The short term momentum indicators (Stochastic RSIs) are resetting to the bottom for the 4-hour, 8-hour, and 12-hour, perhaps in time to provide the momentum going forward into next week.
Traders should be aware that the market can go in any direction - down as well as up. Risk management is incredibly important and should be used at all times.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
