For many investors, the sideways price action for Bitcoin is both irritating and fear-promoting. A breakdown could be just as likely as a break up. However, a bullish chart pattern is developing that would more likely lead to a breakout to the upside.
Friday is here once more, and the dreaded Bitcoin options are expiring. In recent times this event has put the dampers on Bitcoin, as bullish longs traders have been chased down and their positions liquidated.
This time around, a notional value of $1.1 billion in Bitcoin options contracts is due to expire today. The max pain point, where most long and short traders would be liquidated, is at around $60,000. Therefore, a quick visit back to this level would not be surprising.
A very bullish pattern
Source: TradingView
Nevertheless, the above 4-hour chart is displaying a very bullish setup for the $BTC price. Most of the price fluctuations since early August have been contained inside what has developed into an ascending triangle. This is a very bullish pattern, which would normally break out to the upside.
The pattern shows a series of higher lows, while the price is flat along the top of the triangle. Price is being squeezed towards the apex of the triangle, and should breakout soon, given that Bitcoin commonly does not go all the way to the end of these patterns.
Taking the fibonacci levels for this particular sideways movement, it can be seen that they line up beautifully with the price action inside the triangle. The price has bounced off of the 0.618, and this also happens to be at $60,000, which is the max pain level for the Bitcoin options expiry. A quick revisit of this level might also line up with a touch of the triangle bottom trend line.
It can be seen how each time the price rose to the top of the triangle, not only was it battling with the top trend line, but also with the 0.786 fibonacci, at a price level of around $61,400.
Should the breakout indeed take place to the upside, and confirm above, a measured move could take the price of $BTC all the way back to the all-time high at $73,800.
Higher time frame also very bullish
Source: TradingView
Zooming right out into the weekly time frame, it should be noted that the $BTC price is currently fighting to get above $61,000. If it succeeds to hold above this level at the end of the week, this would be bullish. One must also note the stochastic RSI at the bottom of the chart. A cross here by the end of the week could signal that all the momentum Bitcoin needs, with which to get back to the all-time high, can be supplied.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
