The cryptomarket remains coiled as we lead into the weekend with no new highs and no new lows being established for bitcoin. However, it is nicely consolidating on lower time frames and hints toward the possibility of another leg up:
Figure 1: BTC-USD, Hourly Candles, Consolidating Pennant
The pattern shown in Figure 1 outlines a potential continuation pattern called a “bullish pennant.” It’s characterized by consolidating volume and consolidating price that yields lower highs and higher lows and has general upper/lower trendlines. This particular pennant is quite sizable as it is consolidating at the top of a 12% market rally that pushed the price to test the $4,000 range. A general price target for an upward breakout of a pennant is calculated by taking the length of the run upward (called the “pole”) prior to consolidation and extending it from the point of breakout:
Figure 2: BTC-USD, 2-Hour Candles, Bullish Pennant Measured Move
In our case, the measured move for our pole is $430. If we break out upward, we can expect, at minimum, to retest the upper band of resistance discussed in last week’s analysis[1]. And, if we are lucky, we could see a move to test the mid $4,000s.
Figure 3: BTC-USD, Daily Candles, Test of Current Highs
The current rounds of bullish pressure correspond to a breakout of a massive consolidation pattern called a “symmetrical triangle.” We are set up for a strong macro move to the upside, but we have yet to break our current bearish market structure. A daily close above the red dashed line would be a step in the right direction as this would indicate bearish exhaustion and an inability to overwhelm the current buying pressure.
If we manage to close a new high above the red dashed line and
