Bitcoin Might Rally to $42,000 If This Rare Bottoming Pattern Validates
Bitcoin Faces Critical Test as U.S. ETF Trading Begins
Bitcoin, the largest cryptocurrency by market capitalization, has shown a slow decline since the trading of U.S. exchange-traded funds for the digital asset began on Jan. 11. It now faces a critical test as a bottoming signal on its charts is being confirmed.
Bitcoin Climbs Over 4% Before Trimming Gains
On Wednesday, Bitcoin surged over 4%, reaching a high of $40,527 before slightly reducing its gains to trade at $40,091 at press time.
Positive Outlook for Bitcoin’s Price
Following Bitcoin’s recent bounce from lows of $38,501 on Jan. 23, there is speculation that it may have bottomed in a “descending wedge with a classical throw-over.” If this is the case, Bitcoin could rally to $42,000 before retesting $40,500 and potentially skyrocketing. The overall view remains very bullish for the Bitcoin price, according to Glassnode cofounder “Negentropic.”
Market Speculation Surrounding Bitcoin ETF Approvals
Speculation in the digital asset markets increased leading up to the Bitcoin ETF approvals, with a general sell-the-news event unfolding in the following days.
Bitcoin’s Resilience in Market Corrections
According to Glassnode, Bitcoin has shown increased resilience in market corrections, with the largest drawdown reaching only -20.1%, a relatively low value compared to historical precedence. This marks the fourth time in the last year that Bitcoin has experienced a 20% drop.
Future Projections for Bitcoin’s Price
Analysts believe that historical patterns indicate that Bitcoin could experience further upside increases following declines, potentially providing buying opportunities for investors looking to capitalize on the cryptocurrency’s potential rise.
Elliott’s Wave Theory and Bitcoin
Elliott’s wave theory suggests that Bitcoin may find a base between $36,000 and $38,000 before a fifth wave reignites its previous ascent in the market.
This article was originally published on U.Today
