Bitcoin (BTC) may be down 70% from its November 2021 high, but its rebounding move over the past three weeks is raising the possibility of more gains in Q3.
Bitcoin is facing a 30% spike in its price
At the core of the bullish argument is a technical pattern called the “Adam and Eve double bottom.”
Specific, the structure appears when the price forms two cycles of bottom and recovery. The first cycle, called “Adam”, features a pointed bottom, while the other, called “Eve”, is round in shape. Furthermore, the peaks of both cycles form a common resistance line.
The Adam and Eve pattern resolves after the price breaks above the resistance line, accompanied by an increase in trading volume.
As a rule of technical analysis, the target of the breakout is usually a length equal to the maximum distance between the low point of the pattern and the resistance line.
Considering the technical descriptions, the BTC/USD pair has come close to breaking out of an Adam and Eve pattern. Suppose the price closes above the resistance line of the structure. So its probability of continuing its rally towards $28,000-$28,500 will be higher.
That is equivalent to a rise of more than 30% in the third quarter of 2022 if measured from the current price level.
Contradictory price signal points to $16,000
Nevertheless, On longer time frames, the bullish Adam and Eve structure seems to conflict with another technical setup that suggests more pain for Bitcoin in the coming days.
Called an “ascending triangle”, the continuation pattern forms when the price consolidates within a horizontal trendline resistance and an ascending trendline support, after a sharp move higher or lower.
Interestingly, it appears to be forming on the daily candlestick chart after Bitcoin’s downtrend, suggesting that the price is likely to meet overhead resistance, as shown in the chart below.
The bearish scenario of the ascending triangle sees the range of $16,000-$20,000 depending on the breakout point.
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