Bitcoin rises briefly above $46k – Chart signal shows: The bulls are preparing for battle

August 26, 2021


Bitcoin rises briefly above - Chart signal show The bulls are preparing for battle

The bitcoin price hit $46,000 a few hours ago for the first time in months after its worst-ever sell-off in the second quarter. The push has continued through the end of the week - a decisive close that has left an extremely bullish battle cry.

The pattern known as the "Three White Soldiers" is often a sign that a strong uptrend is brewing - but it is often accompanied by an appearance of weakness. Learn more about the potentially important pattern and what it could mean for the current crypto market cycle here.

Bitcoin bulls prepare for battle

The bitcoin price has recently begun an uptrend after weeks of scraping support around $30,000. The bears' repeated failure to push prices lower gave the bulls the confidence to rally nearly 50% from the highs reached earlier this year.

The three-week uptrend, confirmed with yesterday's weekly close, has formed a bullish Japanese candlestick pattern called Three White Soldiers.

According to Investopedia, Three White Soldiers "indicates a strong shift in market sentiment" and is characterised by three similarly sized candle bodies in a row. It is "important to note that the strong upward moves could create temporarily overbought conditions", the website adds.

If the pattern holds true, there could be a short-term setback - followed by an explosive uptrend. A similar pattern occurred almost a year ago to the day. The result: nine months of the strongest uptrend Bitcoin has ever seen.

Bitcoin bulls

"Three black crows" example in crypto: with and without trap
A collapse similar to the bear trap in August 2020 would set the bitcoin price back to around $35,000 before it goes on an all-time high, possibly reaching the final leg of the bull run.

The bears may not get their short-lived trap this time either. As with most chart patterns, for every upward signal there is an opposite downward signal. The opposite signal to the Three White Soldiers is called the Three Black Crows.

collapse similar

Three Black Crows appeared before the crash to the bottom of the bear market, and the same signal appeared again at the June 2019 peak at around $14,000 per BTC.

In the first scenario, there was no retracement and Bitcoin simply fell through support like a ton of bricks. In the second scenario, a bull trap and retest of over 40% occurred in October 2019. The move did break the record for one of the largest daily moves in history. However, it failed to break through the resistance level and regain it as support.

After another failure, the bitcoin price fell back to its bear market low on Black Thursday 2020. If the two bullish signals (Three White Soldiers) also alternate in terms of retracement, there might not be a bull trap and instead the cryptocurrency breaks through resistance as easily as support fell in December 2018.

polkadot-1

In our review we have shown how easy it is to stake Tron TRX and the same applies for the Polkadot DOT cryptocurrency

About the author

Hi there, my name is Zalman Weinberg. I'm enthusiast with over 7 years of experience in cryptocurrencies and blockchain. Professional Trader providing Blockchain solutions to Startups and Enterprises. Expert in all cryptocurrency exchange APIs (BitMEX, Bittrex, Binance, Bitfinex, Kraken, Poloniex, Gdax etc.). I have also worked with multiple Forex broker APIs.

Leave a Reply

Your email address will not be published. Required fields are marked

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}