Bitcoin price broke a rising wedge pattern yesterday, and now bears are in control. Multiple elements suggested that the price of Bitcoin will have a hard time extending its rally above the 60k level.
First, there was a huge bearish divergence with the RSI. Second, the rising wedge is massive as it formed for quite some time. Finally, the rejection at the 60k level comes into the context of a double top pattern.
On the fundamental side, Tesla just announced this week that it would allow Bitcoin as payment for its cars. The move triggered a bounce on the price of Bitcoin because Tesla added that it would not sell the Bitcoin received from any car sale. Just the opposite – Tesla will hold.
But dark clouds appear on the horizon as China prepares to introduce its digital yuan. Commercial banks there already promote the product to their clients, and the fear is that new regulation will forbid competitors.
Bitcoin Price Technical Analysis
The chart below speaks for itself. Now that the rising wedge broke lower, bears may want to remain on the short side with a stop at the highs and a target at 44k or below. Depending on the aggressiveness of the move, the target may be extended to 61.8% of the wedge’s length or even to full retracement.
Bitcoin Price Forecast