Disclaimer: The findings of the following article are the sole opinion of the writer and should not be taken as investment advice
Bitcoin has surged by 8% over the last 48 hours, a figure that is not really uncommon to a volatile asset like Bitcoin. However, the surge included 2-3% candles with consolidation separating them. At press time, Bitcoin was still in the said consolidation, with its charts pointing to a move to the upside in the short-term.
Bitcoin 1-hour chart
Source: BTCUSD on TradingView
The attached one-hour chart for Bitcoin pictured the formation of a bullish pennant, one that indicated a target that was a 3.40% surge away. However, with the cryptocurrency’s price consolidating and fueling confusion and chaos, Bitcoin’s price might be pushed either way.
Although a bullish pattern in nature, there was the possibility of bears taking control, leading to a dump and the formation of a Bart pattern. This Bart pattern would threaten future performances and hurt past surges as well.
Apart from the Bart position threatening the price performance, there seemed to be a fake-out that could be as harmful as a Bart pattern.
Hence, care should be advised before entering a long position and appropriate stop-loss must be employed.
A long position with an entry at the press time price [$11,354] and a stop-loss at $11,266 [at the base of the pennant] would be enough to absorb any short-term volatile movements.
The pole of the pennant indicated that theoretical take-profit levels are at $11,753 [a 3.74% surge from press time price levels]. Since this is a make or break scenario, one needs to take care of the downsides as well.
Hence, should the price head lower to form a Bart pattern, there are two important support levels, as shown in the chart above. The first zone ranges from $11,104 to $11,014. And, although unlikely, the second zone ranges from $10,945 to $10,832.
At the time of writing, the price had already confirmed a breakout to the upside. Hence, longing at [$11,416, an immediate resistance] would also yield similar profits.
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