Above looks at Bitcoin on a monthly and weekly basis. In the left chart, Bitcoin Monthly has spent the majority of the past 5-years inside of rising channel (1). It hit the top of the channel late last year, where it created a large bearish reversal pattern (bearish wick) and prices started immediately heading lower.
Over the past few months, the weekly chart highlights that Bitcoin could be forming a bearish descending trianglewith support coming into play at (2). Roughly two-thirds of the time when this pattern forms, the asset falls in price.
Both charts reflect that a support test is in play at (2). If support would give way at (2), the “descending triangle measured move” suggests that Bitcoin could head towards the $3,500 level at (3).
The Power of the Pattern believes that the support test at (2) is the most important support test for Bitcoin in the past 5-years!
What do bulls want to see? Bulls would love to see support hold and falling resistance taken out, which would break the bearish descending triangle pattern.
This article is brought to you courtesy of Kimble Charting Solutions.