- Bitcoin rebounded on Friday, reversing a small portion of its losses from yesterday's sell-off.
- The cryptocurrency has declined from a convincing support trendline.
- It now appears to be a trend within a technical pattern that has a 70 percent success rate at higher shipping prices.
Bitcoin recovered a day after a significant sell-off that cut the price by 6.33 percent.
The benchmark cryptocurrency rose 1.96 percent to $ 9,449 when traders bought the intraday dip. The pullback movement was evident near a short-term rising trend line: This rise has repeatedly limited Bitcoin's downtrend attempts from more massive breakdowns.
Earlier this week, the bitcoin price seemed to be breaking above the horizontal trend line (red) in the graph above. This price cap is around $ 10,000, a level that has prevented Bitcoin from reaching a full-fledged outbreak since February 2020.
If you consider both the rising and the horizontal trend line together, an ascending triangle is created. Technically speaking, the pattern is formed as the asset continues its upward trend. This is usually a bullish indicator with a 70 percent success rate when it comes to increasing the price of the asset.
Try Bitcoin again for $ 10,000
Bitcoin's recent $ 10,000 retracement brought the price close to Ascending Triangle's support. Traders convincingly confirmed the trend line as their place of accumulation as the price rose higher. The overall price action increased Bitcoin's ability to retest horizontal resistance to $ 10,000.
At least this indicates an ascending triangle. The asset fluctuates between its areas unless it approaches or hits the vertex of the pattern – where the trend lines converge. Then, 7 times out of 10, it breaks bullishly above the resistance.
So far, the current movements of Bitcoin fit the description of an ascending triangle. Meanwhile, the total daily volume decreases as the price rises, further suggesting a possible breakout as the cryptocurrency approaches the apex of the triangle.
In ideal circumstances, Bitcoin should break up to the maximum height of the triangle. That's about $ 1,800. This means that if the rising triangle stays true to its technical description, Bitcoin could cost up to $ 11,800.
In the meantime, the pattern could also cause the price to drop below triangle support. Such a collapse would lower the price by a maximum of $ 1,800. So the downside target of Bitcoin is around between $ 7,352 and $ 8,185 as of the time of the negative outbreak.
The fundamental mix
Bitcoin's short-term price movements also reflect movements in US stocks. The sale on Thursday coincided with similar declines in the Dow Jones, Nasdaq Composite and S&P 500 benchmarks.
The US stock market suffered from the Federal Reserve's warning of slower-than-expected economic growth, which continued to be wiped out with a slower recovery in the labor sector. Both stocks and Bitcoin have rallied since March, driven by the Fed's aggressive stimulus measures.
On Friday, US stocks reduced some of their recent losses, with the S&P 500 futures hinting to open the day up 1 percent. Bitcoin rose in tandem like a real correlated good.
Wall Street's increasing influence on Bitcoin could destroy Ascending Channel's narrative. Still, the correlation could break if the market decides to hedge the Bitcoin stock market. Some investors, including experienced hedge fund manager Paul Tudor Jones, have recently followed a similar strategy.