Bitcoin (BTC) has been trading inside a symmetrical triangle over the past week.
Technical indicators and the longer-term outlook support a breakout from this triangle that would eventually take the price to a new all-time high.
Bitcoin in a Symmetrical Triangle
The BTC price has been trading inside a symmetrical triangle since reaching a high of $18,977 on Nov. 21. Today, the price dropped to the support line of the triangle and created a long lower wick and a hammer candlestick, a sign of buying pressure.
The point of convergence between support and resistance occurs on or near Nov. 27, at which point a decisive move out of the pattern should occur.
The MACD has been gradually increasing over the past two days, supporting the possibility of a breakout from the triangle.
A breakout that travels the entire height of the pattern would take BTC all the way to $19,900.
BTC Rally Coming to an End?
The BTC price has been following a parabolic ascending support line since the upward move began in September. The price is still trading above this line, approaching the all-time high resistance near $19,500.
The rally is heavily overbought, with both the RSI and MACD being near their highest ever levels. Furthermore, the Stochastic oscillator is close to making a bearish cross.
So, while another price increase seems likely because of the short-term readings, a retracement is overdue and could occur after the triangle breakout is complete.
Wave Count
The BTC price is likely in the fifth-and-final wave of a bullish impulse (shown in orange below).
The presence of the triangle suggests that this is sub-wave 4 (red), after which the price should break out.
A likely target for the top of the move would be between $20,855-$21,000, the 3.61 Fib extension of sub-wave 1 and the projection of sub-waves 1-3 to the bottom of subwave 4.
Conclusion
BTC is trading inside a symmetrical triangle, from which a breakout is expected that could take the price to a new all-time high.
For BeInCrypto’s previous Bitcoin analysis, click here!
Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto
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