In early-January, I wrote a piece called “Watch This Bitcoin Triangle” in which I showed a triangle-shaped chart pattern that I believed foreshadowed another sharp move upon a breakout or breakdown from the pattern. Since then, Bitcoin has continued to consolidate and appears to still be forming this pattern, which looks like a descending triangle.
Descending triangles are continuation patterns that lead to further bearish action upon a successful break to the downside. The key levels to watch are the horizontal floor or support of the triangle pattern as well as $3,000, which is a key psychological level that many traders are watching. If Bitcoin can break below both of those levels in a convincing manner, even further bearish action is likely as the cryptocurrency bubble continues to unravel.
The weekly chart puts the latest descending triangle pattern into perspective:
For now, I am waiting for a confirmation in the form of a breakout or breakdown and I will continue writing these updates.
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