The two crypto leaders by market capitalization seem to have correlated movements. Although Ethereum (ETH) is more bullish than Bitcoin (BTC), they are both in rising wedges. A well-known chart pattern that usually precedes a decline.
Bitcoin (BTC) and Ethereum (ETH): Towards the end of the rising wedge compression?
Charts of BTC and ETH display the same very clear chart pattern: the rising wedge. This figure is depicted as a narrowing channel, tilted upwards. Most of the time, it arises in an uptrend, and precedes its continuation.
But in the case of these two cryptos, the figure appears after a strong downtrend. This figure may indicate the weakness of the sellers who can no longer generate a strong downward impulse. This leaves room for buyers, who are starting to gain strength.
But there is an even more believable explanation for these rising wedges on Bitcoin and Ethereum. The Bears are beginning to liquidate their short positions. This is because the price of these digital assets is reaching significant areas. What are these areas? Around $19,500, the 2018 high for Bitcoin (BTC), and $900 for Ethereum. Thus, a pattern like this wedge forms to mark that sellers exit the market.
Which scenario is the most likely?
Does this rising wedge sign the end of the long bearish trend on Bitcoin and Ethereum? Or is it just a figure that confirms the continuation of the decline?
According to Tagado Bitcoin’s tweet, this figure is generally bearish. Thus, the second scenario is the most likely. Indeed, based on historical data, the price tends to break such a figure down.
Thus, opening a short position on Bitcoin and Ethereum would then be the most appropriate, following this rising wedge.
If we look closely, we can see that each triangle directs the price of these two cryptos towards resistances. For Bitcoin, the top of the rising wedge is found around $25,500. For Ethereum, the triangle leads it towards $2,100. Opportunities to sell? Let’s stay alert.
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