Bitcoin downside trend over the weekend has been corrected and BTC is now back above $10K, staying around $10,300 at press time after reaching $10,330 earlier to register its highest point for the year. Thus, affirming that the cryptocurrency is back on the upside trend with a parabolic drive.
As Bitcoin continues to trend on the rising wedge for another resistance around $10,500 in the near term and probably $11,000 before the month ends, a crypto trader has said there might be a danger zone.
The crypto trader by name TradingShot on Trading View said he had observed Bitcoin’s long-term bullish trend as it received one of the strongest bullish signals from Ichimoku cloud last week. He however said the buying pressure is gradually fading out, and a possible retracement may set in.
While analyzing Bitcoin’s short-term trend, he said Bitcoin has since the November low (even before the December bottom) been on a parabolic course and since the beginning of January, Bitcoin has been on the upside trend.
Image Credit: Trading View
The crypto trader said the fact Bitcoin attempted moving close to the 10350 1-week Resistance level is a great signal that the cryptocurrency has initiated a bullish rally.
He maintained that since January 3, the uptrend has been backed by a Channel Up (dashed lines), and every higher low point reached by Bitcoin on the channel was formed on a symmetrical line from the preceding higher high (the green bold lines), keeping the momentum awake.
Bitcoin RSI Rising Wedge
The RSI is yet another bullish indicator for Bitcoin.
The rising wedge as displayed by Bitcoin fractal is close to exhaustion as the highs are flat-lined around 70.000 – 71.000. TradingShot furthered that this is an indication the market buying momentum for Bitcoin is gradually fading, calling for a pullback.
He said as long as Bitcoin continues to fail in breaking the 10350 1W Resistance, there are high chances the parabolic channel breaks down and a channel down to the downside would be witnessed.
The Ichimoku analyst illustrated the zone on the chart by the orange triangle. This can be regarded as the most important area for Bitcoin in the short term as BTC remains neutral between.
TradingShot averred that a break below would probably make Bitcoin retrace the 0.500 Fibonacci at $ 8200.
However, a break above the resistance, in his opinion, would let Bitcoin sustain its bullish momentum, going parabolic to maintain a channel up pattern.