- Bitcoin broke above a bearish falling wedge pattern, and then experienced a clean bullish retest, followed by a steep bounce.
- Price currently trades above the major EMAs, and recent daily closes indicate momentum is once more in the direction of the buyers.
- Weekly chart retains a bullish trend line and its 50 EMA, while the Stochastic RSI indicates possible reversal of a cycle.
Bitcoin appears to be entering a bullish phase following a breakout from a classic falling wedge pattern on the daily chart. Price action, technical indicators, and market structure are aligning, pointing to a potential trend continuation.
Falling Wedge Breakout and Bullish Retest
A recent tweet from trader Merlijn The Trader pointed out a confirmed breakout from a falling wedge that had formed since February. This pattern is commonly associated with bullish reversals. It was marked by two downward-sloping trend lines showing lower highs and lower lows.
After breaking above the upper trendline, Bitcoin executed a bullish retest of the previous resistance. Price temporarily dipped but quickly rebounded, validating the breakout. This action signals renewed buyer strength and market conviction.
Reclaiming Moving Averages and Strengthening Trend
Following the breakout, Bitcoin is now testing a ribbon of exponential moving averages. These EMAs are transitioning from red to yellow and green as the price climbs above them. Recent daily candle closures above the EMAs suggest continued upward momentum and buyer control.
The falling wedge pattern and bullish retest offer a foundation for potential upward continuation. Price movements show increasing strength with each push above resistance, supported by continued interaction with key moving averages.
The confirmation through a clean retest is seen as a green light by many traders. With price reclaiming previous support and technical structure aligning, expectations are building around further upward expansion.
Weekly Chart Supports Macro Bullish Outlook
In the larger context, the weekly chart of Bitcoin also favors a bullish outlook in the longer-term context. Bitcoin was trading at $85,840 at press time, which is far above the 50-week EMA at $78,140. This underlines the sustained strength in the market structure.
Bitcoin retained a stable upward trend since the beginning of 2023, underpinned by a strong uptrend channel of a long-term ascending trendline. Irrespective of occasional volatility, the trendline remains intact. This stable support line indicates ongoing buying interest in the higher timeframes.
The Stochastic RSI on the weekly chart is deep in oversold territory. It shows a potential crossover with the K line at 16.94 and the D line at 12.29. Historically, similar setups have preceded upward moves, often aligning with major cycle shifts.
The bounce off both the trendline and 50 EMA points to growing interest around these levels. Should momentum continue, the price may challenge the $90,000 to $100,000 range. This structure remains intact, offering a stable outlook for swing and position traders.
