Bitcoin Price Forecast: Signs of Strength or Impending Failure?

Bitcoin broke out of a bullish pennant pattern on Monday, but by Tuesday it was showing signs of weakness. Following Monday’s breakout high of 72,777 Bitcoin retraced all of Monday’s advance and then fell below Monday’s low of 69,037. That put it right back into the consolidation pattern and it could lead to a failed breakout if Bitcoin doesn’t recover to the upside quickly. It hit a low of 68,200 today, which may still be the low by the close.

Centerline Support Tested Tuesday

A horizontal dashed line has been added to the center of the pennant, at the apex, where the two lines defining the boundaries of the pattern cross. It helps define the middle of the consolidation pattern, roughly. You can see that it was tested as support with today’s low price. A daily close below the level, which is at 68.671, would increase the risk of a correction and a failure of the pennant breakout.

Needs to Rally Above Today’s High for Signs of Strength

If Bitcoin can recapture today’s decline and eventually close above the 71,792 minor swing high at the top of the pennant, it has a chance to proceed to higher prices. When calculating the measuring objective from the pattern, a minimum target of 92,054 is indicated.

However, the first higher price target looks to be around 77,660. It includes the 161.8% extended target of a large rising ABCD pattern that begins from the September 2023 swing low and is shown on the chart in green. A bullish breakout above yesterday’s high of 72,777 clears the way for a continuation higher.

Drop Below 68,200 Likely Leads to Lower Prices

Alternatively, a drop below today’s low of 68,200 increases the chance for a drop to the lower boundary line of the pennant and possibly a further drop. Potential support is at the 50-Day MA, currently at 65,198, and the most recent minor swing low at 64,500. A decisive decline below 64,500 indicates a failure of the bullish pennant. Lower prices may then be tested as support. However, given the significance of the 50-Day line to define dynamic support on the way up, support is anticipated to be seen there.

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