Bitcoin’s recent price behavior is everything the bulls hoped forand that may be exactly the problem. Since bottoming out around $63,000 in early April, Bitcoin has posted a series of higher highs and higher lows. and has now been recovered $80,000. The structure looks bullish. However, technical analysis shows that Bitcoin has done just that now entered deceptive terrain.
Bitcoin’s uptrend may be hiding a compression phase
Bitcoin’s price action is now forming an interesting but deceptive pattern. The pattern in question is a rising wedge that has formed on Bitcoin’s daily chart since February. The setup was emphasized by crypto analyst Merlijn The Trader, who described Bitcoin’s current pattern as “the most misleading pattern in crypto.” His chart places Bitcoin at the top of the wedge, with the $84,000 area acting as a key rejection zone.
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A rising wedge is formed when price action moves upward along two converging trend lines, pushing higher highs and higher lows into a narrowing channel. The pattern resembles an upward price trend where the market continually reaches higher levels and never drops below previous price lows before bouncing back to the surface. However, a rising wedge is known to resolve bearish rather than bullish.
The chart shared by Merlijn shows Bitcoin pushing up within this structure, with the upper wedge line around $84,000. That area is the zone where bulls can undergo their greatest test.
That makes the next step around $80,000 to $84,000 area very important. A clean move above the upper limit would weaken the bearish wedge argument. A rejection around $84,000, followed by a breakdown below $80,000, would pave the way to lower price levels.
Bitcoin price chart. Source: @MerlijnTrader On X
Crash under $60,000?
The $80,000 price point now has both psychological and technical weight. Bitcoin recently regained this level for the first time in months, helped by improve market sentiment.
Merlin’s chart turns that same level into the breakdown trigger. According to the outlook, a break below $80,000 would confirm weakness within the wedge and open the way for a decline to $56,000. This doesn’t mean Bitcoin is guaranteed to fall there, but it does show where the bearish projection comes from if the wedge goes down.
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At the time of writing, Bitcoin is trading at $80,920, having risen between $79,879 and $81,227 over the past 24 hours. This narrow range shows that buyers are still active around the $80,000 level. preventing clean demolition below the zone for now.
The price action also kept Bitcoin from showing any important sign of distribution, while support remains at the lower end of the range. All that needs to happen now for bullish momentum is a weekly close above $84,000. However, a weekly close below $80,000 could shift the setup in favor of the bearish path.
Featured image created with Dall.E, chart from Tradingview.com