Bitcoin could retrace its path towards $ 20,000 in the upcoming sessions, says a chartist at TradingShot, an independent investment advisory firm.
A $ 21,000 bitcoin
In his Wednesday note, the analyst wrote that the benchmark cryptocurrency expects a strong rebound after testing a short-term support trendline. The trendline serves as part of a formation of the ascending channel and forms a sequence of higher highs and higher lows.
Due to the previous fluctuations, the TradingShot analyst was able to predict a fractal repetition on Wednesday. Today, the price is expected to retreat after testing the lower trendline of the ascending channel, which partially confirmed the call from the Bitcoin analyst, who extended its upward move towards the upper trendline, which is near $ 21,000.
Bitcoin trade setup, as presented by TradingShot. Source: BTCUSD on TradingView.com
Additionally, the channel support is in line with the 200 period wave of the four hour time frame moving average. The TradingShot analyst noted that it could additionally induce traders to re-accumulate Bitcoin on the lower trendline levels.
“Since Channel Up has been very consistent with its high, low and middle trend lines since November 5th, we should consider this a very strong support for BTCand a possible rebound point, ”he explained. “The next high is just above $ 21,000.”
Meanwhile, the bitcoin analyst also discovered a newly developed descending channel pattern that could overshadow his bullish outlook.
In retrospect, the channel appears as part of an inverse head and shoulders pattern, with the previous retest of the ascending channel support acting as the IH&S floor and separating two top trendline retests that serve as the right and left shoulders.
The analyst focused on the right shoulder from which the descending canal originated.
“The 26./27. November is the head. Assuming the channel breaks up, the IH&S can take the right shoulder BTCUSD as low as the region $ 16,200 – 16,000. With that (on the 4H card) be on a channel below ( Divergence) since November 5th (exactly matching the channel up of the price campaign) this is certainly possible. “
The downside target near $ 16,000 coincides with the 50-day moving average wave for Bitcoin, which is also a level of support among traders.