Jan Happel and Yann Allemann, co-founders of Glassnode, a cryptocurrency analysis company, project an optimistic scenario for the price of Bitcoin (BTC). They identified a classic bullish technical pattern on the Bitcoin chart, suggesting a possible major recovery for the leading cryptocurrency.
According to Happel and Allemann, Bitcoin may be approaching the end of a falling wedge. The analysis follows a technical pattern used in market analysis to predict bullish reversals. This pattern is characterized by a sequence of decreasing peaks and valleys that converge and form a wedge. The decreasing space between these peaks and troughs indicates a weakening in selling pressure, which could signal an imminent change in market direction.
The co-founders of Glassnode also resort to Elliott Wave theory, a method that analyzes price movements based on collective psychology manifested in wave patterns. According to this theory, upward price movements occur in five waves, followed by three-wave corrections, known as “ABC”. They suggest that Bitcoin may be at the beginning of a bullish reversal after completing a five-wave descending cycle.
Theory suggests possible start of an upward price trend
Furthermore, analysts point to a bullish divergence in Bitcoin’s Relative Strength Index (RSI). The RSI is a widely used momentum indicator that helps identify overbought or oversold conditions for an asset. A bullish divergence in the RSI, accompanied by the falling wedge pattern, reinforces the outlook that Bitcoin price could be preparing for a significant recovery.
At the time of analysis, Bitcoin was trading at $40,073, registering a 2% increase in the last 24 hours. These technical signals, combined with Glassnode analysis, offer a glimmer of hope for investors that Bitcoin may soon reach much higher levels.
According to Happel and Allemann, if the observed trends are confirmed, Bitcoin could initially test resistance around $42,000. Thus, a new test will follow at around US$40,500, before moving towards a more significant upward movement.
The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing or trading cryptocurrencies carries a risk of financial loss.