Chart patterns help in predicting how the crypto market will perform in the short term. Accordingly, analysts believe that the Rising Wedge pattern formed on Bitcoin’s chart days ago, signals a reversal from the bull market. But how will the market play out?
A Rising Wedge pattern where higher lows are formed faster than lower highs was recently spotted on the Bitcoin chart. This pattern is also evident when an upward slope is created after price consolidates between resistance and support.
And as theory holds, each time the Rising Wedge pattern is formed, it signals a reversal from a bull market. Hence, if Bitcoin price breaks out of the Rising Wedge range, it could trade in a direction opposite to the current trend.
Bitcoin Could Trade Downwards Based on Indicator
Bitcoin, on the other hand, has been in an uptrend for the past few weeks. As such, based on the bullish reversal indicator, it can be assumed that the market could possibly suffer another downtrend.
Nevertheless, the leading cryptocurrency surged to new heights this year and even made a year-to-date high. On February 5, 2020, Bitcoin spiked to about $9,700 and traded around the zone briefly. As at press time, the asset is valued at $9,600 and could be gearing up to revisit the $10,000 zone. Besides, Bitcoin has surged by over 34% since January 2020.
Fundamentals Show Bitcoin Could Make More Bull Runs
Asides from taking a look at technical indicators, fundamental analysis of the crypto asset shows a lot of promise. For starters, it’s halving in May will reduce the supply of the virtual asset by 50%. And given that it’s a whole three months away from the halving, the chances of more bull runs may be higher than what the bearish indicator is pointing out.
In line with that, recent data revealed that the cumulative number of Bitcoin transactions surged above 500 million in February. The latter shows high adoption for the asset, and more demand for the virtual currency often impacts on its price. Specifically, demand and supply are the fundamental drivers of cryptocurrencies.
The crypto community, on the other hand, has made bold predictions for Bitcoin. For instance, Tom Lee, co-founder at Fundstrat Global Advisors believes the leading cryptocurrency will spike by an average of 197% over the next six months. In his opinion, this prediction will hold since Bitcoin has moved above its 200-moving day average.