The Bitcoin Price Consolidates, Forming a Bullish Pennant Pattern
The Bitcoin price has been relatively stable this week, with daily candles reflecting uncertainty from both bulls and bears. However, a closer look at the lower time frame reveals the formation of a bullish pennant pattern, suggesting potential future growth for BTC. This pattern indicates that a breakout from the current consolidation phase could release the Bitcoin price from its current uncertainty.
Analyst Projects $31K as Firm Floor Based on 200WMA
Bitcoin 200 week moving average is 31k. When bitcoin price diverges from 200WMA, in accumulation (blue) and bull markets (orange/red), bitcoin has never gone below 200WMA. So 31k might be the absolute floor, and bitcoin might never see 31k ever again IMO. Also 200WMA is rising… pic.twitter.com/3kqSbXWLjU
— PlanB (@100trillionUSD) February 3, 2024
According to renowned analyst @planB, Bitcoin’s 200-week moving average (WMA) currently stands at $31,000. This level has historically served as a critical benchmark for Bitcoin’s price movements. During accumulation phases and bull markets, the price has never fallen below the 200 WMA. This suggests that $31,000 could be a solid floor price for Bitcoin. Additionally, the rising trajectory of the 200WMA further supports the idea of sustained growth for Bitcoin.
Should You Enter Now?
After a sell-off following the ETF decision, Bitcoin has rebounded strongly from $38,500 to reach a high of $43,900, indicating a recovery rally. However, the price has since entered a consolidation phase within a pennant pattern on the daily chart. Currently priced at $42,957, a breakout from this pattern’s resistance could continue the recovery rally and provide opportunities for new market entries. If this breakout occurs, Bitcoin’s price could surpass $45,000 and potentially target $48,000.
Technical Indicator
- Exponential Moving Average: When the coin price trades above the crucial EMAs (20, 50, 100, and 200), it signals a bullish short-term trend.
- Relative Strength Index: A daily RSI above 60% indicates an active recovery trend.
Hot Take: Bitcoin’s Future Growth Potential
The formation of a bullish pennant pattern suggests that Bitcoin’s price may break out of its current consolidation phase and experience future growth. Furthermore, analysis by @planB indicates that $31,000 could serve as a firm floor price for Bitcoin, supported by the rising trajectory of the 200-week moving average. If a breakout occurs, Bitcoin could continue its recovery rally and potentially surpass $45,000. With the coin price trading above crucial EMAs and a daily RSI reflecting an active recovery trend, entering the market at this point could present opportunities for profit.
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