Bitcoin Price Rising Wedge May Backfire on Bitcoin Bulls

Bitcoin price corrected from the highs as Coinbase, the first crypto exchange to be listed publicly, made its debut in New York. Coinbase ended up the day 15% lower and so has put pressure on the price of Bitcoin as well. However, Bitcoin remains close to all-time highs, as investors see the listing of Coinbase as yet another sign of increased adoption of the crypto market.

The $60k level turned out to have a meaningful significance for Bitcoin. On the one hand, it is the level where the market hesitated a month and a half. On the other hand, by making only marginal new highs, Bitcoin formed a rising wedge pattern.

But rising wedges are not only reversal patterns – they can act as continuation patterns too. A continuation pattern appears when the rising wedge acts as a running triangle in a complex, bullish correction as suggested by the Elliott Waves Theory. By the time the price breaks higher, the move that follows is usually the extended third wave in a classic impulsive structure.

On the other hand, a move below the lower edge of the pattern emphasized the reversal pattern.

Bitcoin Price Technical Analysis

Both bulls and bears should wait for a breakout either above or below the two trendlines of the rising wedge. On such a move, the plan involves going long or short, placing a stop-loss order at the opposite edge, and aiming for a risk-reward ratio of 1:2 minimum.

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