The Bitcoin price has been trading within a range ever since making the $42k ATH. This sideways market has produced a very high-quality trade setup that we will be talking about in this Bitcoin analysis.
We will also be talking about our likely profit targets, as well as the important levels that we will be keeping an eye on for both the bearish and bullish price scenarios.
The Converging Triangle Pattern
The converging triangle pattern is a very high-quality trade setup, it provides us with an entry point and likely profit targets to take advantage of. Right now, that pattern is forming on the Bitcoin 1-hour timeframe with the possibility of the price breaking out any time soon.
A Bitcoin Bullish Breakout
For the bullish scenario, we need the Bitcoin price to break through the upper resistance channel of the converging triangle pattern. This breakout would signify the end to the tug of war between the bulls and the bears and we can expect to see Bitcoin continue going higher in the coming days.
The important target level to watch for is the $49k price region. This is the traditional target level for price to get to after breaking out of a converging triangle.
However, it is also important to keep an eye on the $42k previous ATH. This level might serve as a key resistance to the Bitcoin price once it breaks out of this sideways trend.
A Bitcoin Dump To $20k
The next scenario we will be taking a critical look at is the Bitcoin bearish scenario. For this scenario to play out, we must see the Bitcoin price crash, breaking through the base of the converging triangle.
This crash would likely drive the Bitcoin price lower to the $20k price region. This price regio serves as the traditional price target for this converging triangle pattern.
This $20k price region also served as important resistance for the price all through 2020 and might come into play again but this time as major support.
To gain more information on how to partake in this coming Bitcoin Bull run and trade this cryptocurrency, you can read our How To Trade Bitcoin Guide. You can also check our top list of Best Bitcoin Exchanges To Trade With.