The Bitcoin price hit the $ 46,000 mark for the first time in months a few hours ago after experiencing the worst sell-off ever in the second quarter. The push has continued beyond the weekly close – a crucial closing point 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 a semblance of weakness. Learn more about the potentially important pattern and what it could mean for the current crypto market cycle.
Bitcoin Bulls Prepare for Battle
The Bitcoin price has recently taken an uptrend after scratching around $30,000 in support for weeks. The repeated failure of the bears to push prices down gave the bulls confidence to recover from the highs reached at the beginning of the year by almost 50%.
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 sharp change of mood in the market” and is characterized by three similar-sized candle bodies in a row. It is ” important to note that the strong upward movements could create temporarily overbought conditions,” the website continues.
If the pattern holds, there could be a short – term reset followed by an explosive uptrend. A similar pattern occurred almost to the day exactly a year ago. The result: nine months of the strongest uptrend Bitcoin has ever seen.
“Three Black Crows” Example in Crypto: With and Without Trap
A slump similar to the August 2020 bear trap would push the Bitcoin price back to around $ 35,000 before heading to an absolute high and possibly reaching the final leg of the bull run.
It could be that the bears do not get their short-lived trap this time either. As with most chart patterns, there is an opposite down signal to each up signal. The counter signal to the Three White Soldiers is called “Three Black Crows”.
Three Black Crows popped to the bottom of the bear market before the crash, and the same signal popped up 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. True, the movement broke the record for one of the largest daily movements in history. But she did not manage to break through the resistance level and recapture 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 just as easily as support fell in December 2018.
Text credits: Newsbtc
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