The Bitcoin price is trading inside an ascending channel, but technical indicators are showing weakness. A breakout is more likely, but both options remain possible.The Bitcoin price is currently trading inside an ascending triangle and has been doing so since reaching a high on May 14. At the time of writing, it was trading very close to the resistance line, and approaching the end of the triangle, which is projected to occur on May 23 at the latest. Even though the ascending triangle is considered a bullish pattern, there is a considerable bearish divergence developing in the RSI.
Bullish Bitcoin ScenarioIn the bullish scenario, the price is still correcting from the May 9-14 upward move, doing so inside an A-B-C-D-E wave count. Therefore, if the price breaks out, the rally is likely to be rapid, reaching a top of around $10,900, which is found by projecting the length of wave (1) to wave (3).
Bearish ScenarioIn the bearish scenario, this is still an A-B-C retracement that has been going on since the May 8 high at $10,065. This scenario presents itself more clearly when looking at higher time-frames. Relative to that May 8 high, the recent highs beginning on May 12 are slightly lower, so a descending resistance line is drawn that connects them. The price is still in the process of generating the C wave, which is likely to be the sharpest of the three and could end near $7,800. To conclude, the Bitcoin price is trading either inside a bullish ascending triangle or has created a bearish triple-top pattern. Since both scenarios seem likely, the prudent play would be to wait for a clear breakout or breakdown before attempting to initiate a position. For those interested in BeInCrypto’s previous Bitcoin analysis, click here.
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.