The Bitcoin price traded sideways all through the week. This price range can be clearly seen in the 1-hour timeframe and indicates that we are currently having a moment of indecision in the crypto market.
But once this price indecision is over with, Bitcoin has a very high probability to start trending again. However, the question traders are asking now is “in what direction do we expect the Bitcoin price to trend in the coming days?”
And to better answer this question, we will be analyzing the Rectangle Pattern what it means for Bitcoin and how we plan to trade it.
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Bitcoin Rectangle Pattern
The Rectangle Pattern is a high-quality pattern that helps us understand exactly what the price is doing. This pattern usually forms when the price of an asset is ranging/trading sideways, and once broken we expect to see a massive move in the direction of the breakout.
We are seeing this exact same formation play out right now in the Bitcoin 1-hour price chart. And what we are currently waiting for is a breakout to either the upside or downside in the coming days.
Until we see a price breakout like this, it is best to stand aside and wait for that Bitcoin-ranging market to come to an end.
Trading The Rectangle Breakout
The first thing to be cautious of is that the Rectangle pattern can either break out to the upside or downside.
And in the section below we will be going in-depth into what these individual breakouts or break down might look like and the key levels to watch out for.
1) Bitcoin Bullish Breakout
For a bullish breakout, we want to see the BTC price breakthrough and close above the resistance/upper-end range of the Rectangle Pattern.
A bullish close like this pushes the Bitcoin price above the range zone, indicating the end of the sideways market and a potential for a bullish rally to follow in the coming days.
2) Bitcoin Bearish Break Down
For the bearish breakdown, we want to see the BTC break and close below the support/lower end of the range of the Rectangle Pattern.
A breakdown like this indicates that the support has given way and there is a very high likelihood for us to see more selling pressure begin to re-enter the Bitcoin market in the coming days.
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