Bitcoin Turns Bullish
Bitcoin broke the descending triangle pattern on the 4-hour chart on July 21, indicating a significant and unusual breakthrough.
What is a descending triangle pattern?
The descending triangle is a bearish chart pattern which is made up of lower highs and horizontal lows, which usually indicates that the demand for the coin is weakening.
To draw a descending triangle, the pattern requires at least 2 highs (preferably 3) and 2 lows (preferably 3). In the figure above, we have connected 6 highs and 4 lows. The more candles that can be connected, the stronger the pattern becomes, and the more significant the breakout when it occurs.
What does this mean for the market?
Bearish Triangles tend to be broken downwards, and a crash usually follows. However, Bitcoin made a bullish breakthrough instead. A bullish breakthrough is when the price breaks the upwards channel and starts making higher highs.
Looking ahead: Although this is a significant breakthrough, it does not necessarily change the current market conditions. Because the pattern is mostly visible on the 4-hour and 1-hour chart, it is not as strong as if it were present on the daily chart. That said, this breakthrough does suggest that we are now heading to the resistance at $10,500. Whether we will break this resistance remains to be seen.
What is a descending triangle pattern?
The descending triangle is a bearish chart pattern which is made up of lower highs and horizontal lows, which usually indicates that the demand for the coin is weakening.
To draw a descending triangle, the pattern requires at least 2 highs (preferably 3) and 2 lows (preferably 3). In the figure above, we have connected 6 highs and 4 lows. The more candles that can be connected, the stronger the pattern becomes, and the more significant the breakout when it occurs.
What does this mean for the market?
Bearish Triangles tend to be broken downwards, and a crash usually follows. However, Bitcoin made a bullish breakthrough instead. A bullish breakthrough is when the price breaks the upwards channel and starts making higher highs.
Looking ahead: Although this is a significant breakthrough, it does not necessarily change the current market conditions. Because the pattern is mostly visible on the 4-hour and 1-hour chart, it is not as strong as if it were present on the daily chart. That said, this breakthrough does suggest that we are now heading to the resistance at $10,500. Whether we will break this resistance remains to be seen.
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