Bitcoin is hovering around $85,000 USD and on the monthly chart, it has completed a breakout from a long-term falling wedge. A similar technical pattern also appeared in previous cycles, and now investors are waiting to see if a bullish crossover of the MACD indicator will confirm it.
Don’t miss: Top 10 Cryptocurrencies Under $1
Falling Wedge Pattern Recalls Previous Cycles
On Bitcoin’s long-term chart, a similar structure can repeatedly be observed during bear markets. The price forms lower highs and lower lows, with their range gradually narrowing into a falling wedge formation. A breakout above its upper boundary is often viewed by technical analysts as one of the signals of weakening selling pressure and a potential return to an uptrend.
Similar developments could also be observed in 2019 and 2023. In past cycles, the breakout was followed by a return of the price towards the upper edge of the wedge, which then served as a support area. However, such a retest may not occur immediately and, in some cases, could take many months.
Also read: Coinbase: Cryptocurrency Exchange Review
MACD May Provide Further Trend Confirmation
Another monitored indicator is the monthly MACD, which, after a previous bearish crossover, is gradually approaching the opposite signal. A bullish cross occurs when the faster line of the indicator crosses above the slower one. Because MACD works with moving averages, it reacts to price developments with a delay and serves more as a confirmation of an already ongoing trend.
A potential crossover could occur after several months of stable Bitcoin development above current price levels or after a significantly strong bullish month. Meanwhile, the MACD histogram has been shrinking in recent periods, indicating a weakening of previous negative momentum. Investors can monitor the development of similar technical signals, for example, through the analytical platform TradingView.
You might also like: crypto4me review
