Following Bitcoin’s near 3-month high of $46,600, the last few days have resulted in some rangebound movement. However, the formation of a newer high has solidified a broadening wedge pattern, which has tremendous upside potential going forward. BTC was trading at $44,894 at the time of writing, down 2% in the previous 24 hours.
Daily Bitcoin Chart
Isolating the movement of BTC since the sharp retracement revealed a broadening wedge pattern formed by higher highs and higher lows. The pattern’s highest ($46,660) and lowest ($28,600) points showed a 70 percent range, presenting the maximum upside for Bitcoin in the event of an upward breakout.
In such a case, BTC would reach a new high around the $80,000 mark. Until that goal is met, traders should keep an eye on Fibonacci levels for potential support and resistance areas. Keep in mind that this outcome is only valid if the current pattern functions as a reversal pattern, as it emerged following BTC’s mid-May drop. To refute this thesis, BTC must fall below the $28,000 price level.
The Relative Strength Index formed two lower peaks, indicating a slight bearish divergence from BTC’s price action. The Squeeze Momentum Indicator has also shown a slight drop in the last few days as buyers took a breather following BTC’s explosive move.
DMI lines also contracted, indicating that the market’s uptrend was easing. These indicators suggested that BTC was due for a correction before continuing its upward trend. Once this is reversed, BTC will most likely resume its bullish narrative.
Bitcoin’s uptrend came to a halt, but consolidation was beneficial in the long run. Calculating its highs and lows within a broadening wedge predicted an additional 70% upside from the pattern’s upper trend, pushing BTC to the $80,000 level. Rather than an immediate rally, such a result can be expected in the coming months.