The left chart highlights that Bitcoin has spent the majority of the past five years inside of rising channel (1). Bitcoin hit the top of this channel last month, where selling pressure has started taking place.
Once Bitcoin hit the top of the channel last month, it could be forming new falling channel (2), where lower highs and lower lows are taking place.
The bottom of falling channel (2) looks to have started on a bullish reversal pattern at (3), which took place at the 11,200 level. Last week this level was tested, where bullish reversals took place.
Key support is being tested again today at (4), where Bitcoin bulls have their fingers crossed that support holds. If support does not hold at (4), Bitcoin could end up testing the bottom of falling channel (2) again.
Bitcoin (BTC) rose $0.11 (+0.04%) in premarket trading Tuesday. Year-to-date, BTC has gained 5.93%, versus a % rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Kimble Charting Solutions.