Bitcoin Crafts 'Bullish Wedge,' Keeping Hopes Alive for Record Highs Above $126K
Bitcoin is exhibiting a bullish technical pattern known as a falling wedge, suggesting potential for a rally to new highs above $126,000 despite recent corrections. A breakout above $106,000-$107,000 could confirm this pattern, signaling a rebound. However, failure to hold above $100,000 could cause a deeper correction towards $90,000. Traders are advised to monitor price action and volume closely.
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Overview of Bitcoin's Current Market Position
This is a technical analysis post by CoinDesk analyst and Chartered Market Technician Omkar Godbole. Bitcoin (BTC) $105,042.98 is down but not out and may be setting the stage for a rally to new highs above $126,000. That's the message from the price chart, which shows the sharp pullback from the record high of $126,000 on Oct. 8 to recent lows near $106,000, leaving many bulls demoralized. However, this scenario is quietly shaping a classic bullish technical pattern known as a falling wedge.
Understanding the Falling Wedge Pattern
The falling wedge is characterized by converging downward trendlines that form as selling pressure wanes and the price consolidates in a tightening range. Historically, this pattern precedes upward breakouts, signaling a potential reversal from bearish momentum to renewed buying interest. The appearance of this pattern in BTC suggests that the ongoing correction, which has unsettled many traders, might actually be setting the stage for its next leg higher.
Implications of the Bullish Setup
BTC has carved out a bullish falling wedge pattern (as seen on TradingView). If prices rise past the upper boundary of this wedge, currently around $106,000-$107,000, it could confirm a bullish wedge breakout. Such a move would open the door for a rebound toward $126,000 and potentially new records, fueled by recovering momentum and improving market sentiment. This bullish setup is further supported by clear signs of demand resurgence in both the spot market and U.S.-listed spot ETFs.
The Risks Involved
That said, while falling wedge patterns have a strong historical success rate, they are not infallible. Traders should remain vigilant, constantly monitoring price action and volume to confirm the pattern's development. A potential break below the pivotal $100,000 support level—an important on-chain threshold—could trigger a more profound correction, possibly pushing prices toward the next support near $90,000.