5 January 2024
As anticipation builds around the potential approval or rejection of spot Bitcoin (BTC) exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC) on January 5, the Bitcoin price has witnessed a notable 2.7% recovery in the past 24 hours.
This development comes amidst growing speculation about the patterns that could drive the Bitcoin price to reclaim the highs lost during the bear market in 2022.
Notably, crypto analyst Ali Martinez has identified an ascending parallel channel as the governing pattern behind the Bitcoin price action since September 2023.
Bitcoin Price Faces Crucial Test At $48,000
According to Ali Martinez’s analysis, Bitcoin prices have exhibited a consistent pattern known as an ascending parallel channel.
This technical formation suggests that the BTC’s price has been trading within the confines of a channel characterized by an upper and lower boundary, as seen in the chart below.
BTC could experience further price movement within the defined boundaries if the ascending parallel channel pattern holds.
The price is expected to advance toward the upper boundary, which currently resides around $48,000. However, the Bitcoin price is anticipated to face resistance at this level and retrace towards the lower boundary at approximately $34,000.
Following the retracement, a rebound toward the upper boundary, potentially reaching around $57,000, could be expected.
The upcoming decision by the SEC regarding spot Bitcoin ETF applications adds a layer of significance to Bitcoin’s price movement. The approval of Bitcoin ETFs has been a subject of great interest within the cryptocurrency community, as it can enhance liquidity and provide greater legitimacy to the cryptocurrency market.
While the outcome of the SEC decision remains uncertain, the ascending parallel channel pattern reveals a compelling technical perspective that could impact Bitcoin’s price trajectory.
Critical Moment For BTC?
Supporting the upside potential of the Bitcoin price in Martinez’s analysis, crypto analyst Rekt Capital highlights the importance of BTC’s ability to establish a strong support level at $43,900.
According to Rekt Capital’s analysis, Bitcoin is exhibiting promising signs as it strives to reclaim the top of the pattern at $43,900 as a support level.
This level holds importance in determining the cryptocurrency’s ability to sustain upward momentum. Rekt Capital suggests that a daily candle close above this resistance is essential for Bitcoin to make another attempt at moving higher.
The successful establishment of $43,900 as a support level and a daily candle close above this resistance would signify a positive development for Bitcoin’s upside potential.
It would indicate a renewed bullish sentiment and potentially pave the way for further price appreciation. However, failure to overcome this resistance level and ending up as an upside wick could hinder Bitcoin’s ability to sustain upward momentum in the short term.
On Wednesday, Bitcoin trades at $44,000, followed by a news-driven dip toward the $40,800 level.
Featured image from Shutterstock, chart from TradingView.com