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The Bitcoin bullish rally is currently forming an Ending Diagonal Pattern on the 1-hour timeframe. This Ending Diagonal Pattern is a reversal pattern and points to a likely change in the Bitcoin trend sooner or later.
This pattern is also forming at a very key resistance level on the 1-hour timeframe, creating a Bitcoin price confluence, and increasing the possibility for us to see this bearish sell-off actually play out.
In this Bitcoin analysis, we will be breaking down what we want to see play out in the coming days as well as how we plan to take advantage of this bearish pattern, and the bearish targets we are aiming for.
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Trading The Ending Diagonal Pattern On Bitcoin
For us to confirm the completion of the pattern and the start of the Bitcoin sell-off, the base channel support of the Ending Diagonal Pattern must be broken on the 1-hour timeframe.
A break below this key channel support indicates the end of the Bitcoin bullish rally and a possible start to the coming sell-off and price correction.
This makes it very important for us as traders to stand aside and wait until we see that breakdown confirmation below the base channel support of the Ending Diagonal Pattern on the 1-hour timeframe before we take any sell trade.
Key Levels To Watch
Once this Bitcoin sell-off starts, it would remain valid as far as the BTC price continues to trade below the $46,039 key resistance level on the 1-hour timeframe.
This level has been held on numerous occasions and we believe it will continue to serve as great resistance for the Bitcoin price as time goes on.
This makes the $46,039 key level the best place to put your stop loss and watch for invalidation to the bearish move.
Bearish Target For Bitcoin!
For our Bitcoin bearish target, we are watching for a sell-off back down to the $40,654 horizontal key level on the 1-hour timeframe.
This is about a -10% decline in the price of Bitcoin and the standard target for the Ending Diagonal Pattern.
The sell-off is still yet to start so we will keep monitoring the Bitcoin price more closely to see how price will react at this key region in the coming days.
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