NEW DELHI (CoinChapter.com) — A classic Bitcoin bullish pattern is setting its price up for a fresh rally above $38,000, up about 10% from the current BTC/USD exchange rates. The upside signal comes despite the ongoing Binance-DOJ drama. Let’s discuss how strong technicals will outpower weaker fundamentals.
Bitcoin Bullish Pattern Shows Strong Upside
In the past few days, there was a steady increase in Bitcoin price above the $30,000 resistance. The BTC/USD pair gained bullish momentum and even surged above the $35,000 resistance. Finally, the bears took a stand near the $38,000 level after a strong Bitcoin bullish pattern breakout, as shown below.
A high was formed near $37,974 before the price started a consolidation phase. There were a couple of swing moves, but every time the bulls failed to clear the $38,000 resistance zone.
Recently, there were many important events related to exchanges, SEC, and DOJ. The main event was Binance’s settlement and the company’s CEO, Changpeng “CZ” Zhao, stepping down. Bitcoin did react sharply to the downside but remained strong as buyers were active above $35,500.
On the positive side, the SEC Commissioner recently said, “There’s no reason for us to stand in the way of Bitcoin ETF” during a Bloomberg interview.
Now, BTC seems to be following a bullish pennant with resistance at $37,650 on the daily chart. This is a classical Bitcoin bullish pattern historically, delivering higher returns on investment in most cases.
A clear upside break above the pennant resistance could spark bullish moves. The next key resistance sits at $38,000. A daily close above $38,000 might lift Bitcoin and send it toward the $40,000 resistance.
Any more gains — thanks to the Bitcoin bullish pattern — might open the doors for a move toward the $42,000 region in the coming days.
Fresh Decline in BTC?
Please be cautious that not every Bitcoin bullish pattern, with a history of delivering solid returns, is 100% accurate.
If Bitcoin price fails to resume its rally above the $38,000 resistance, there is a risk of a fresh decline. Immediate support is near the $36,150 level and the pennant lower trend line. The first major support is near the 23.6% Fib retracement level of the upward move from the $24,917 swing low to the $37,974 high at $34,900.
A close below the $34,900 support might increase selling pressure, invalidating the Bitcoin bullish pattern. In the stated case, the price may perhaps decline toward the 50-day simple moving average (blue) at $33,000.
The next key support is near the 61.8% Fib retracement level of the upward move from the $24,917 swing low to the $37,974 high at $29,900, below which the bears might aim a test of $25,000.
Overall, Bitcoin price is holding gains above the $36,150 support. If BTC clears the $38,000 hurdle, it could start a fresh increase toward $42,000. If not, it might continue lower toward $33,000.
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