As anticipation builds around the possible approval or rejection of spot Bitcoin (BTC) exchange traded funds (ETFs) by the US Securities and Exchange Commission (SEC) on January 5, Bitcoin price has witnessed a remarkable 2.7% recovery in the last 24 hours.
This development comes amid growing speculation about the patterns that could drive the Bitcoin price to regain the highs lost during the 2022 bear market.
Crypto analyst Ali Martinez in particular has done this identified an ascending parallel channel as the leading pattern behind Bitcoin price action since September 2023.
Bitcoin price faces a crucial test at $48,000
According to Ali Martinez’s analysis, Bitcoin prices exhibit a consistent pattern known as an ascending parallel channel.
This technical formation suggests that the BTC price trades within the boundaries of a channel characterized by an upper and lower limit, as shown in the chart below.
BTC could experience further price movements within the defined range if the rising parallel channel pattern holds.
The price is expected to rise towards the upper limit, which is currently around $48,000. However, Bitcoin price is expected to encounter resistance at this level and return to the lower limit of around $34,000.
After the retracement there was a rebound towards the upper limitwhich could possibly be around $57,000 could be expected.
The SEC’s upcoming decision on spot Bitcoin ETF applications adds a layer of significance to Bitcoin’s price movement. The approval of Bitcoin ETFs is a topic of great interest within the cryptocurrency community as it can increase liquidity and provide greater legitimacy to the cryptocurrency market.
While the outcome of the SEC decision remains uncertain, but the rising parallel channel pattern reveals a compelling technical perspective that could impact Bitcoin’s price trajectory.
Critical moment for BTC?
Crypto analyst Rekt Capital supports the upside potential of the Bitcoin price in Martinez’s analysis highlights the importance of BTC’s ability to establish a strong support level at $43,900.
According to Rekt Capital’s analysis, Bitcoin is showing promising signs as it aims to reclaim the top of the pattern at $43,900 as the support level.
This level is important in determining the cryptocurrency’s retention ability upward momentum. Rekt Capital suggests that a daily candle above this resistance is essential for Bitcoin to make another attempt at moving higher.
The successful establishment of $43,900 as a support level and a daily candle close above this resistance would mark a positive development for Bitcoin’s upside potential.
It would indicate renewed bullish sentiment and possibly pave the way for further price increases. However, failing to overcome this resistance level and ending up as an upside fuse could hinder Bitcoin’s ability to maintain upside momentum in the short term.
On Wednesday, Bitcoin is trading at $44,000, followed by a news-driven dip towards the $40,800 level.
Featured image from Shutterstock, chart from TradingView.com
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