During the 12/18 session, we noted that Bitcoin was forming a triangle against the US Dollar. After that observation, BTCUSD broke below the triangle and continues its bearish correction, testing what we anticipated as support in the 17800-18000 area.
BTCUSD 1H Chart
- A head and shoulders turned into a triangle.
- Now price action appears to be forming a falling wedge.
- The structure of this correction so far is choppy compared to the prevailing upswing.
- This difference suggests that this is indeed a correction to the trend, meaning we should anticipate a completion of consolidation, and a subsequent bullish swing.
- But now, these bullish swings will be tested around 18200.
- If we see the 18200 pivot start to hold as resistance and BTCUSD falls below 17800, we should look for a ride down to 16500.
- At this point, a break back above 18500 with a break above the wedge resistance can sign a bullish continuation.
- Also, we should make sure the 1H RSI breaks at least above 60 before considering the bullish continuation scenario.