Despite much optimism in the blockchain sphere, many cryptocurrencies are still looking bearish. At a first glance, looking at any aggregator website shows most cryptocurrencies in the red for the past 7 days. On the other hand, analyzing the charts from a correct technical perspective shows a different story. Bitcoin, the biggest cryptocurrency by market cap is showing an interesting consolidation that signals a potential price boom. In this Bitcoin Price Prediction, we’re going to assess Bitcoin prices by looking at the technicals and place a potential trade setup.
Bitcoin Prices sank by more than 30%
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It is no surprise that cryptocurrencies recently lost a lot. Whenever such events happen in the cryptocurrency market, it is often due to 2 main factors:
- Important bad news affecting cryptos on a macro level
- Regulat price adjustments and profit-taking
The second is mostly what happened recently. After an extensive bullrun that lasted since April 2021, cryptocurrencies and specifically Bitcoin prices needed to adjust and return to the average uptrend. In figure 1, we can clearly see how prices soared high and Bitcoin became overbought. This often signals an upcoming heavy price adjustment.
This is exactly what happened. Bitcoin prices soared towards USD 69,000 and needed an adjustment back towards the average uptrend.
Bitcoin Prices reached the End of the Dark Tunnel?
Interestingly today, when zooming into the 4-hour Bitcoin chart, we can spot a descending triangle. This technical formation is crucial and gives traders and investors 2 potential scenarios:
- If prices manage to break the upper triangle side, we can confirm the end of the downtrend and enter a trend reversal.
- On the other hand, if prices break below the lower triangle side (specifically the USD 45,500 price area), the downtrend should continue downwards toward the average 1-day uptrend.
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