Bitcoin Price Analysis: Short compression that increases the BTC price to $8.5K
Buyers of Bitcoin are trying to reject the rising bearish wedge pattern right now, after a brief compression in the Bitcoin futures market raised the price beyond $8,300. Will the bulls can maintain this momentum, or will the heavy selling pressure be too challenging to handle? Let's see
Bitcoin Daily Chart
In the daily chart of BTC/USD, we can see that the price is still tightening within the rising wedge pattern that We identified in the previous day. Analysis. Surprisingly, however, the bullish traders managed to close successfully by above the strong resistance zone (red area) of $8,200 yesterday, which was highlighted as a critical historical level.
The unexpected break above this price point has subsequently caused a significant compression in the Bitcoin futures market, with Bitmex reporting a small settlement of $13 million in the last hour alone, according to figures provided by Datamish.
This short squeeze is undoubtedly what is driving the price of Bitcoin 00 above the $8,300 level right now and closing. The gap between the $8,400 above.
However, if we look at a depth of sell orders around the next bullish target, we can see that the bearish traders have already begun to load in anticipation of a massive sale (see below).
A bitter battle now pays off between BTC buyers and sellers.
If bulls capitulate against the increasing selling pressure at the $8,350 / $8,400 level, then the BTC price likely comes out the low of the ascending wedge and tank towards the lower supports. That is, levels of $8,000, $7,800 and $7,610.
However, we could see bullish traders reject this rising wedge pattern if a sufficient purchase volume arrives to counteract the sales wall. A break above this level could trigger a significant increase in FOMO toward the next psychological level at $8,500, where bulls will likely encounter the second wave of bearish opposition.
On the MACD indicator, we can see a marked decrease in sales volume on the histogram as it heads toward a bullish turn. The 12-MA is also approaching the previous 26-MA when the momentum begins to become favorably bullish. At this time, we are waiting to see if the price can be bonanza close above the upper resistance of the rising wedge in the 4-hour chart, to confirm that the bulls have rejected the bearish pattern.
How do you think Bitcoin will break with the rising wedge pattern?