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Crypto News: Bitcoin breaking out of an ending diagonal?

Published: 02.05.2022
by Joseph Jeffriess

Looking at Bitcoin on the 6H chart price pattern could suggest that a new move higher could be starting to develop. Additional time and a little more confirmation is required, but the initial breakout looks to have started for now.

The pattern we are watching looks like an ending diagonal wedge. These patterns are traditionally Elliot Wave based but can be used in normal charting. They show a pattern of consolidation after a trend. A break of the pattern can set off a new trend. We can see the breakout occurring today, and the move started after reconfirming support at 37,800.

From here, we want to see the new move continue to push higher. We would like to see a bit more buyer momentum to really confirm the break, and if and when we see a pullback, we would like to see a new higher low formed and the next rally to break to the previous high, signalling that a new trend could be underway.

If we see a new pullback to support, that could be seen as a small worry as short term momentum may not be as strong as first thought. A break below support cancels out the idea. Keep in mind bitcoin has been sensitive to FED updates around inflation and policy. This week we have the FOMC on Thursday morning AEST. Rates are set to go higher, but the market will be looking at the statement to gauge just how much further they could increase due to the ongoing inflationary worries in the USA. Recent history has seen Bitcoin pr=erform poorly off the back of FED updates around policy adjustments to rein in inflation.

This week’s FOMC meeting could have an impact on the current Bitcoin pattern.

Bitcoin 6H Chart

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