After a retest of what has become an important zone in the recent Bitcoin (BTC) market structure, the leading crypto bounced hard off of $5,000 to the upset yesterday and has taken a clear tone of consolidation in what may be a symmetrical triangle.
The rejection from around $5,350 on April 10, to the subsequent dump and test of $5,000 in the following days, has formed one side of this triangle which now contains Bitcoin’s price action.
Within this large pattern was a rising wedge pattern, which BTC fell out of on April 15 to do the retest.
The critical moment came yesterday as Bitcoin rebounded hard after a brief micro-consolidation near $5,000. The movement sliced through a previous support/resistance (S/R) zone and into the next higher one, where it was repulsed and thus has laid in the current short term structure.
The 21-hour exponential moving average (EMA, blue below) has served as a good anchor for price in the last few days, with price currently holding above it - but looking ready to break back below into the lower S/R zone (pink below).
The prospect of a symmetrical triangle clearly begs the question of which way the breakout will be; although this question is not absolutely urgent, as the pattern looks to have another week at most to play out.
Paired with the giant flagpole formed by the April 2 breakout, the entire structure looks like a bull flag. Volume had been consolidating and dropping within this range, up until yesterday’s bounce (pink circles, below).
What’s more, should BTC somehow retest $5,350 for a third time, we might consider the entire formation to be an ascending triangle - a bullish pattern that suggests a break up. This latter possibility would probably take more time to play out, however.
Strong Futures Markets
Since April 2, which printed a new chapter in Bitcoin’s recent important price action history, both spot and derivatives-futures trading volumes have spiked significantly.
As CryptoGlobe today reported, the OKEx exchange has come out of nowhere in recent months to become the leading platform for Bitcoin futures contracts in the entire industry, averaging $1.5 billion in futures volume every day. This volume is significantly higher than competitors BitMEX and bitFlyer - and an order of magnitude higher than more institutional offerings like the US CME exchange.
(The views and opinions expressed here do not reflect that of CryptoGlobe.com and do not constitute financial advice. Always do your own research.)