What we’re seeing right now on the Bitcoin price chart is perhaps one of the most widely recognized trend continuation patterns, which is called an inverse head and shoulders pattern. I published a separate idea covering that pattern which you can find here (strongly recommend for reading, if you haven’t read it yet).
In this analysis, however, I’d like to review,the upwards linear trend channels currently present on the Bitcoin price chart, which additionally confirm the prevailing trend upwards.
An ascending trend channel is formed by two parallel trendlines , sloping in an upwards direction.
We can clearly see that price has broken through the upper trendline of the preceding downwards channel, meaning, we got a signal that the short-term trend has reversed upwards.
In addition, the previous sell-off has stopped at a higher level - $10.7k vs. $9.6k, which is a positive signal as well.
The next significant resistance is located at $14,000, and this price is a near-term target for traders (resistance is a price in which selling is expected to be sufficient to stop the rise in price). If the Bitcoin price breaks through and above the $14k resistance, it will become a support (a change in polarity principle).I believe when the price finally breaks through the $14k resistance - the price will surge by a significant amount and gain momentum, and we may achieve the final short-term target at $15,000 soon after the breakthrough.
This combination of chart patterns generates a valid trade signal:
- Buy at $12,000
- Take-profit at $15,500
- Stop-loss at $10,600
- Forecasted P&L: $30,000 per 1 lot with 10x leverage
- Risk/reward ratio: 1:1.6 (attractive)
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