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Bitcoin descending wedge9/2/2023 ![]() Financial markets experience it frequently.This pattern offers profitable ways for investors to make money. Advantages of falling wedge patterns in crypto ![]() Trading volume should decrease during the falling wedge formation because the price has entered a consolidation stage before the bullish breakout. Investors should keep a close eye on the trading volume. The two lines will intersect and descend together. The moment at which the correction ends, the price declines to allow buyers to make a purchase.Ī falling wedge chart pattern can be identified by drawing lines using a trendline connecting lower highs and lower lows. The rally continues at $240.Ī broadening falling wedge is a reversal pattern when it shows up after a bullish trend and a continuation pattern when it does so. The wedge encounters a correction at $130 and reflects an immediate rally. ![]() Later, the coin plummets below $120, forming a falling wedge. The price of Litecoin has been reflecting an upswing since December 2022. The illustration below is a perfect example of this pattern. Example of the falling wedge chart pattern Still, the third component-a decrease in volume-adds further legitimacy and validity to the pattern and is, therefore, very helpful. The first two points must exist in the chart for an accurate falling wedge probability. The volume decreases steadily throughout the channel.There is a convergence of the upper and lower trend lines.The price action shows that it is currently in a downtrend due to lower highs and lower lows.After the energy in the channel has consolidated, the buyers can tip the scales in their favour and drive the price action higher.Īs a result, a falling wedge candlestick pattern has the following three crucial features: The volume, which decreases as the channel converges, is one of the distinguishing characteristics of this pattern. Once the price action breaks through the resistance of the upper trend line, or wedge, the consolidation phase is over. Two trend lines that converge within this pullback are shown. The falling wedge chart pattern is visible when the token shows a bullish trend immediately before correcting the lower. Falling out of this wedge would also clearly invalidate the $43,000 support and would mean a further period of consolidation before a hopeful return to a bullish structure.Top 10 Web3 Games To Explore In 2023 Here List Must Read Where does the descending wedge occurs? This wedge, which would likely not have been invalidated had it not been for the March 2020 collapse, is some $3,000 away from being invalidated. There is however a second wedge that is playing about that dates back even further than the one that has just broken, one that in fact has its roots in 2015 and one that we examined in part two weeks ago: Second Bitcoin Rising Wedge Still in Play There is every chance therefore that this is simply the conclusion of the retracement following the run to $69,000 and that Bitcoin will consolidate around this price range once more, given how important a level it is. It flipped this to act as support in September and acted as the platform from which Bitcoin bounced to all time highs of $69,000. However, taking a closer look at lower timeframes things may not be as bad as they seem:Īs we can see, this level around $43,000 acted as resistance when Bitcoin first approached it in early 2021 and then again in June 2021. The rising wedge, which is typically a bearish chart pattern, takes in the 2018 top and the March 2020 bottom, with its first serious test coming at the end of November:Ī successful defense on that occasion didn’t result in anything more than a stay of execution however, and Bitcoin has finally left the wedge, which in normal circumstances would suggest the end of bullish price action. This drop, while not catastrophic in itself, nevertheless represents a weakening in Bitcoin’s structure, needing it to rely on the prior support of $43,000 to hold if an imminent price recovery is on the cards. Bitcoin needs to hold at $43,000 to spark hopes of an imminent reversalīitcoin has fallen out of a 22-month rising wedge following a sharp drop to $43,000.The wedge in fact has its roots in the 2018 top but the support line dates back to the March 2020 crash. ![]() Bitcoin has exited a 22-month rising wedge.
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