Bitcoin November 20, 2021 – Consolidation, prelude to good news?

It has been a while since the Bitcoin (BTC) had not known such a gloomy week. His inability to overcome his recent records foreshadowed a bull run lacking oxygen. In the space of a few sessions, the sanction fell. Nearly $ 160 billion in market capitalization has evaporated to the point of dropping the king of cryptocurrencies well below the symbolic bar of $ 60,000. As Bitcoin struggles to stay above support around $ 57,000, broader consolidation could take place. But it could also create the conditions for good news in the near future.

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Bitcoin: A break in the middle of its uptrend

It makes sense to take a step back with a weekly chart. In addition to the Ichimoku indicator, we assess the strength or otherwise of the underlying trend over a long period. The fact that Bitcoin is backed by two major supports – respectively at 30,000 and 41,000 dollars (orange pellets) – and that it evolves above the Kumo (cloud), shows that the uptrend remains valid.

However, the big weekly bearish candle in contact with the support at $ 57,000 is not there by chance and approaches the Tenkan, the average price of the high and low points of the last 9 sessions. The fact that it represents the entire movement of the previous four candles, suggests that BTC’s uptrend needed a legitimate break.

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In retrospect, it seemed inevitable with of Chikou Span. The Ichimoku curve which replicates the same variations as the king of cryptocurrencies with 26 sessions behind, repeatedly encountered resistance around ATH. And now it’s near the support at $ 57,000.

If Bitcoin and Chikou Span prices were to drop below $ 57,000, we would come to a decisive turning point in the bull run that has been in place since July 21.

A bearish chart pattern awaiting validation

The daily chart will enlighten us on the movements to come. To say the least, cryptocurrency enthusiasts had better hang on their belts. Fruits of the Big Weekly Bearish Candle, the series of daily candles that took BTC towards $ 57,000, is set to form a bearish chart pattern, le double top.

This well known configuration has an M profile. The lower part of the letter corresponds to the neck line. The underlying in question consecutively achieves two summits of approximately the same level without being able to cross them. The second correction attempt results in the exit of the neck line on the downside. The theoretical objective of this chartist figure corresponds to the transfer of the height between the summits and the neck line.

The decline wins in 75% of cases following a double top whereas the theoretical objective is reached in 71% of cases.

In the Bitcoin situation, both peaks are in the $ 67,000-69,000 area. The neck line represents support at $ 57,000. If the bearish scenario were to be confirmed in the coming days, there would be question of 49,000 dollars and a passage of prices below the Kumo. Which would temporarily invalidate the current bull run.

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However, other technical signals could be important and should be kept in the minds of investors. We have a 29% chance that the theoretical double top goal will not be a reality. The fact that BTC is approaching its uptrend line, could attract the most patient investors. The latter will monitor the $ 53,000.

Why is the $ 53,000 level so critical? Because it is at the level of a support in contact with the uptrend line and represents an old resistance from the last bear run. If the $ 53,000 were to hold up, it could breathe new life into the bull run. As a first step, a return to ATH would be considered. And in a second step, we could go to evolve in unknown territory in search of new heights.

In summary, the objective is to be attentive to the validation of a potential double top in daily units. If the simultaneous breakout of the price of BTC and Chikou Span below $ 57,000 materializes, focus on the uptrend line and the $ 53,000 which will constitute major support for the bull run put in place since July 21. .

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