Bitcoin has for over a week now been stuck under $60,000. However, the downside has also been protected by a critical technical pattern molded on the four-hour chart. Additionally, the Simple Moving Average (SMA) has significantly contributed to making the required support area robust enough.
At the time of writing, Bitcoin trades at $57,835, shortly after losing the support at 58,000. The flagship cryptocurrency seeks support refuge at the rectangle pattern. This classical technical formation brings to light significant resistance and support areas. Traders can buy at the support and perhaps sell at the resistance or wait for a breakout above the pattern.
Note that most technical analysts consider the rectangle formation a bullish continuation. However, there are instances when the pattern results in a correction. Either way, rectangles illustrate a tug of war between the bulls and the bears and may lead to accumulation of distribution, resulting in a technical breakout or breakdown.
As for Bitcoin, if support at the rectangle’s lower limit holds, we will likely see an uptick in the price. Trading past the upper edge would pave the way for a massive continuation pattern above $60,000 and toward $64,000.
BTC/USD four-hour pattern
It is worth mentioning that the sideways trading may dominate based on the Moving Average Convergence Divergence (MACD) indicator’s leveling motion at the midline. Support at the 100 SMA and, by extension, the 200 SMA currently at $56,000 must hold; otherwise, Bitcoin may freefall to $50,000.
Bitcoin intraday levels
Spot rate: $57,835
Trend: Bearish
Volatility: Expanding
Support: $57,000, and $56,000
Resistance: $58,000 and $60,000
