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The longer a pattern takes to develop, generally, the more powerful it is. While some scalpers might get excited about a W forming on a 5m chart, most are looking at the 1H and watching the 50EMA. Pulling back to the 1D is useful to remember where we are in the grand scheme as being drilled down all the time can cause us to lose track of price relativity.
Of course, the W is a bull pattern that signals a price reversal and Bitcoin is in need of that. Price skyrocketed earlier in the year but growth has slowed as capital flows into altcoins and Ethereum leads the way in 2021.
Another note on pattern strength - the patterns that cut across the 50EMA cloud are the ones to pay the most attention to. This particular W is cutting through the 50EMA cloud like a dream.
One thing to note about W patterns is that they need to verify before a trader takes an entry. Meaning that price has got to creep up that last leg of the W at least 20% of the way before entry. It would be nice to see it back on its blue trend line below before thinking the W is confirming. However, when patterns take this long to form... this should be the ticket to $75k we've heard about for so long now.
Let's check in on Bitcoin's 1W oscillators:
RSI is moving back into a very healthy range as is CCI. Stoch RSI has apparently bottomed out and is struggling to make a bullish cross.
Now the 1D MACD:
And finally, the MA Ribbons - more evidence of consolidation.
Support levels remain at 48k and 42k. Resistance is at 51k, 54k, and the wall at 58k.
Happy trading!
*Always DYOR. Not financial advice.
