Are you a fan of Bitcoin and cryptocurrency trading? If so, this latest update on Bitcoin’s lower swing high may interest you. Today’s decline has confirmed a lower swing high for Bitcoin, along with a weekly bearish reversal triggered as last week’s low was broken. A bearish divergence in the relative strength index momentum oscillator (RSI) has been in place since just before the recent peak of 73,836. Excitingly, the oscillator is set to break below the prior swing low as bearish momentum intensifies.
At Extreme Investor Network, we are closely monitoring two likely scenarios that are unfolding. With a second lower swing high in place, a double top is a possibility. However, to trigger the 50-Day MA and next lower internal uptrend would need to be busted to the downside. The most recent swing low support at 60,771 is the neckline level and a drop below it will trigger a breakdown from the double top. If this scenario unfolds, Bitcoin could be in a correction for months as it would be below the 50-Day MA.
On the flip side, there is potential for a bullish pennant trend continuation pattern to be established. The lower boundary of the pattern would be reached near the internal uptrend line and the 50-Day line, preceded by a pole which is the sharp rally that occurred prior to the pennant. An upside breakout would be anticipated in this scenario. We believe that determining which scenario is unfolding should be relatively soon, as the 50-Day line and trendline could be reached in days. Furthermore, if Bitcoin continues to trade inside the pattern before hitting the 50-Day line, it would be leaning towards the pennant scenario.
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