Bitcoin (BTC) Technical Analysis: MASSIVE Bullish Signal on 1W Chart, a Repeat of Last Year’s Late Surge?

Bitcoin has broken bearish out of a bullish pennant in the last 24 hours, as sellers battle to keep BTC below the major $6,800 resistance above. In the absence of any detrimental news and with a noticeable decline in BTC/USD shorts on the futures market, we can assume that the -2.10% decline from yesterday’s close is a minor manipulative movement.

So why would anyone want to drive BTC’s price down right now?

Last month, Bitcoin was rising strongly towards its long-standing sloping resistance after rebounding out of the $5,800 danger zone. Just as the asset was within $100 of finally breaking this level, a massive 10,000 BTC short position was placed and a huge volume of Bitcoin was dumped shortly after; with the #1 cryptocurrency crashing $2,000 in 2 weeks.

Right now, Bitcoin is close to reaching the downtrending resistance again, after taking 18 days to recover from the previous heavy sell-off. Not only this, but there is also now a huge bullish signal that has just appeared on the one-week chart that spells big news for the cryptocurrency going forward into Q4. Because of this, it makes a lot of sense for market manipulators to try and crash the asset’s price as much as possible so that they can buy back in cheap before it really starts to boom.

If you’ve looked at any Bitcoin technical analyses lately, you’ll see that most people have identified a falling wedge and/or a descending triangle pattern that BTC falls into.

Falling wedges are typically bullish continuation patterns. However, Bitcoin has a long way to go before it reaches consolidation where the reversal part usually happens. Depending on how the wedge is drawn, the consolidation point could be anywhere from the $4,400 mark up to the $5,000 level. This means that BTC could potentially fall a further -33% from its current price before we could expect a significant turnaround.

Descending triangle patterns are usually bearish continuation patterns where the asset tracks along a base support until bears eventually force the asset below it. The base support area for Bitcoin is generally around the main supports at $5,800 and $6,000. It is worth noting however, that if this support region does fail then the bullish falling wedge pattern described above would still be a viable option for the asset.

HOWEVER...

There is a very strong bullish signal that has appeared on one indicator in particular, which suggests Bitcoin may be about to do something entirely different than these two patterns.

On the MACD indicator over 1W candles we can clearly see that the 12MA (blue) has finally passed above the 26MA (red) for the first time since October 24, 2016! (yellow arrow). The last time the two moving averages interacted with each other and we saw buying candles above the signal line was back on January 22, just after the crypto market began to correct heavily from its all-time high point.

This tells us that very strong buying momentum has returned to Bitcoin and so long as the 12MA continues to hold above the 26MA, we should expect big things soon.

This doesn’t mean that Bitcoin won’t experience heavy selling pressure in the meantime. Whenever Bitcoin is looking strong it is not too uncommon for the asset to suddenly do the opposite as market manipulators and whale traders interfere with the cryptocurrency’s performance.

The first target for Bitcoin will continue to be the $6,800 mark and from there would like to see it finally break the downtrending resistance which for now, sits somewhere near the $6,900 area. From there the $7,400, $8,500 and $10,000 levels will be big tests for bulls to overcome.