Bitcoin Price Set to Reclaim $8K But a Rising Wedge Is Worrying Bulls
Bitcoin price (BTC) is taking a bit of a breather after breaking flipping the $7,600 resistance to support during the morning trading hours of Nov 29.
While the current technical setup is exciting, bulls will need to supply significant enough volume for the price to break to the upside of the rising channel, above the $7,800 resistance and the 61.8% Fibonacci retracement level.
Crypto market daily performance. Source: Coin360
Buyers stepped in on Friday morning, pushing Bitcoin price from $7,430 to $7,880 before pulling back to $7,750. Currently, Bitcoin trades in a rising wedge and the price remains capped below the resistance at $7,800.
Today’s upside move brought the price above the midpoint of the long term descending channel and the moving average convergence divergence (MACD) on the daily and 6-hour time frame suggests that additional upside is in store.
At the time of publishing the MACD line is crossing above the signal line and the histogram has flipped from negative to positive. Since the move to $7,400, many traders have set their short term targets at $8,000 to $8,100
BTC USD weekly chart. Source: TradingView
On the weekly timeframe, the volume profile visible range (VPVR) and previous price action history show that $7,800 to $8,200 zone will be difficult to overcome but a positive note is that the MACD histogram appears to be in the early stages of an uptrend as selling pressure lessens.
The weekly relative strength index (RSI) has also sharply reversed course and now aims for 46. Another positive sign is that Bitcoin’s price has recovered back above the 100-week moving average.
As mentioned earlier, Bitcoin price has already recovered to the descending channel midpoint and traders who opened positions at $6,540 will look for Bitcoin price to reach $8,000 before taking partial profits and leaving the remainder in play with the hope that the digital asset will set a weekly higher high at $8,550.
BTC USD 6-hour chart. Source: TradingView
It appears that Bitcoin has flipped the $7,600 resistance to support and over the short-term as price consolidates Bitcoin could pull back to the bottom trendline of the descending wedge at $7,658. This point also lines up with the descending channel midpoint and a high volume node on the VPVR.
On the 6-hour timeframe, the Stochastic RSI and relative strength index (RSI) look ready to roll over but a bounce off the $7,600 support could set Bitcoin price above the $7,800 resistance and toward the main trendline of the rising wedge. Meanwhile, the VPVR shows minimal overhead resistance of $8,069. This $8,069 level lines up with the main trendline of the rising wedge and also the 61.8% Fibonacci retracement level.
If bulls interpret a cross above the 61.8% Fibonacci retracement level as a bullish signal, a high volume breakout could push Bitcoin price above the 200-day moving average (DMA) to $8,700 which is quite near the main trendline of the long-term descending channel.
Such an occurrence would be very bullish for Bitcoin and likely lead analysts and crypto Twitter to call for a sky-high pre-halving bull run price estimates again.
Rising wedges patterns can lead to price reversals. They are marked by the loss of momentum as the asset’s price rises to higher highs but with shorter candles and a decline in trading volume as the price contracts within the triangle. As the Stochastic RSI and 6-hour RSI rollover, selling pressure at the $7,800 resistance and profit-taking at $8,000 (the 61.8% Fib retracement) could all be signals that the pattern will break to the downside.
It will take a high volume spike from bulls to break out of the rising wedge and above the overhead resistances mentioned above. If Bitcoin price does reverse below the rising wedge, the price could find support at $7,500 and $7,178.
The views and opinions expressed here are solely those of the author (@HorusHughes) and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.