Bitcoin Bitcoin Price Analysis: Double Bottom Reversal Chases Out the Bears
In our previous BTC-USD analysis, there was a fear of a massive Head and Shoulders pattern that had very low price projections for the entire crypto market. In a turn of events, when BTC-USD made its test of the Head and Shoulders neckline, it actually responded in a market reversal.
Yesterday, the crypto market took a turn upward as the market leader made a Double Bottom Reversal pattern that sent a market-wide bear run into an immediate bull run. As the BTC-USD market made an attempt to test the boundaries of the lower prices of the bear run, volume began to pick up and sent us into a market reversal. How does one spot this pattern and where are we headed in the next few days?
Characteristics of a Double Bottom Reversal pattern include the following:
A descending trendline within an established bear trend
An initial bottom that temporarily reverses before retesting the established low.
After a test of the previously established low, the test is rejected
It is important to note that in order to confirm the reversal pattern, typically you want to see consistent increased volume at the lower values.
After the low is rejected a second time, it continues upward and breaks the descending trendline established in step 1.
After breaking the descending trendline, the price then forms a “neckline” with the rest of the pattern.
From there, to confirm the trend reversal, we would want to see a break of the neckline followed by a retest of the neckline.
All the above characteristics are very strong indicators of a complete bear market reversal into a bull market. As mentioned in the previous BTC-USD analysis, the bear run would continue the trend downward until significant volume picked up. In our case, the volume picked up very strongly and made a complete market reversal. Much like BTC-USD, this pattern is seen throughout several major players in the crypto market: ETH-USD, LTC-USD, ETH-BTC, etc.
It is unclear where the top of the bull run will lead us, but what is clear is that volume has dramatically picked up, indicating market interest in the higher prices. Until the volume begins to die down, the price will continue to push higher.
Head and Shoulders pattern was strongly rejected in the form of a Double Bottom Reversal.
Bearish trend has ended in a strong bull trend.
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