October 31, 2023
Bitcoin has been experiencing a strong uptrend since mid-October, bringing renewed optimism to the cryptocurrency market. The price of BTC has surged by 32.55% from its last swing low of $26,560, reaching a 500-day high of $35,263. However, the rally is facing supply pressure at the $35,000 level, raising concerns about the sustainability of buying interest.
The presence of intense overhead supply is reflected in the long-wick rejection candle at $35,000. However, a breakout above the pennant pattern could set the stage for a quick 6% jump in the BTC price. The intraday trading volume in Bitcoin is $16.8 billion, indicating a 13% gain.
Due to the supply pressure at the $35,000 level, Bitcoin has been trading sideways in recent weeks. This consolidation has created uncertainty in the market sentiment, resulting in sideways or corrective action in several altcoins.
On the 4-hour time frame chart, the BTC price is forming a bullish continuation pattern known as a pennant. This pattern is commonly observed in established uptrends, allowing buyers to regain bullish momentum for the next leap. As long as the two converging trendlines of the pennant pattern remain intact, the coin is likely to continue its consolidation phase.
Investors looking for the next long opportunity should keep an eye out for a breakout above the upper trendline of the pattern. Such a breakout could unleash a build-up of bullish energy, propelling Bitcoin to a swift 6% advance, reaching approximately $36,500. A more ambitious target would be the pole length of the pattern, suggesting a potential rally to a high of $42,000.
While the near-term outlook appears bullish, it is important to note that the BTC price is currently hovering around a long-standing resistance trendline within a channel pattern. Historical data shows that retests of this line often lead to increased supply pressure and significant price corrections. Therefore, any movement around this resistance level could have a significant impact on the price of Bitcoin.