Bitcoin Holds Trade Opportunity For Bulls, Bears: What You Need To Know

Bitcoin (CRYPTO: BTC) was trading slightly higher on Thursday as the crypto attempted to regain some of the losses suffered on Wednesday, when Bitcoin fell over 5% lower.

The crypto has been trading in a fairly consistent downtrend since March 28, when Bitcoin topped out at the $48,240 level after running into and rejecting the 200-day simple moving average on the daily chart.

Within the downtrend, Bitcoin has developed into a falling channel pattern, creating a series of lower highs and lower lows between two parallel trendlines. The pattern is bearish for the short term but could be bullish down the road.

• For bearish traders, the "trend is your friend" (until it's not) and the stock is likely to continue downward. Aggressive traders may decide to short the stock at the upper trendline and exit the trade at the lower trendline.
• Bullish traders will want to watch for a break up from the upper descending trendline on high volume for an entry. When a stock breaks up from a descending channel, it's a powerful reversal signal and indicates a rally is likely in the cards.

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The Bitcoin Chart: On Thursday, Bitcoin looked to be printing its next lower low at the $42,734, where it tested the bottom descending trendline of the channel as support and bounced. The most recent lower high was printed on Tuesday at $47,200.

If the crypto closes the trading day above the $43,600 level, Bitcoin will print a hammer candlestick on the daily chart, which could indicate higher prices will come on Friday.

The most likely scenario — if Bitcoin is able to reach up to test the upper descending trendline of the pattern — is the crypto will reject the level. If Bitcoin is able to break through the top of the pattern on higher-than-average volume, it could provide a solid entry point for bullish traders who aren’t already in a position.

• Bitcoin will need to regain support at the eight-day exponential moving average (EMA) over the next few days to avoid causing the eight-day EMA to cross below the 21-day, which would be bearish. If the crypto breaks down bearishly from the channel pattern, Bitcoin may find support at the 50-day SMA.
• Bitcoin has resistance above at $45,814 and $48,475 and support below at $42,233 and $39,600.

  

  See Also: How Much Has Bitcoin Gained Since 2021 Miami Conference?

  See Also: How Much Has Bitcoin Gained Since 2021 Miami Conference?