Benzinga - Amid a period of record-breaking highs, Bitcoin’s (CRYPTO: BTC) technical analysis indicates a possible downturn. A classic bearish configuration on the cryptocurrency’s price chart has caught the attention of market analysts, hinting at a potential reversal of the recent bullish trend.
What Happened: A bearish pattern known as a “rising wedge” has been identified on Bitcoin’s price chart, suggesting a potential pullback could be on the horizon, CoinDesk reported on Thursday.
Bitcoin has experienced a significant rally, climbing from $60,000 to record highs above $70,000 in under two weeks. However, the pattern of this ascent is causing concern among analysts. Crypto analyst and trader Josh Olszewicz spoke to CoinDesk, indicating that the rising wedge typically leads to bearish outcomes.
The pattern consists of upward-sloping trendlines that connect the highs and lows of the price chart and converge at an apex, signaling a weakening bullish momentum. A breakdown from this pattern could result in a decline in Bitcoin’s price.
Additional indicators, such as the 10-day rate of change, have shown a divergence from the rising prices, hinting at an increase in downside momentum. This divergence is often a precursor to price corrections, similar to those seen in the 2017 and 2020-21 bull markets.
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"Given the ETF inflows coming in and MicroStrategy's Saylor continuing to buy more, I think even if prices do retrace after potential wedge breakdown, it will be hard for the bears to keep them under pressure for long," Olszewicz explained.
At the time of publishing the story, Bitcoin was trading 0.65% lower at $72,598.49, as per data by Benzinga Pro.
Why It Matters: The cautionary stance from analysts comes on the heels of Bitcoin’s impressive performance, where it soared to a new peak of $73,709, marking its fourth record high in just six days. This rally was propelled by a surge in investments into U.S.-based Bitcoin spot Exchange-Traded Funds (ETFs), with a notable inflow of $1.05 billion on March 12. Blackrock’s IBIT product alone captured a record $849 million.
The market’s enthusiasm was further fueled by discussions surrounding the upcoming Bitcoin halving event. Economist Peter Schiff’s comments on the halving process sparked debate, emphasizing the significance of current supply holders’ actions over the impact of reduced mining rewards. Schiff’s perspective was met with counterarguments highlighting the historical importance of halving events in Bitcoin’s supply dynamics.
Read Next: Jim Cramer Advises Against Using Binance, Provokes Strong Reactions From Twitter Users
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