Bitcoin's potential value soaring towards 112K, as double bottom pattern suggests recovery
Bitcoin's price action exhibits signs of a strengthening trend, with a familiar pattern catching traders' attention. CryptoQuant's latest analysis reveals a textbook double bottom formation, a pattern often associated with trend reversals. This setup potentially indicates a move towards the $112,000 mark. However, traders are advised to exercise caution.
A significant development occurred when Bitcoin surpassed the $109,000 neckline with substantial volume. Currently, the price hovers around $109,400, having formed a double bottom. The target based on the pattern is estimated to be around $112,000.
The double bottom pattern emerged over several days, with the first low at $106,800 on May 23 and a second dip to $106,600 on May 25. The breach of the neckline occurred shortly thereafter, reinforced by strong trading volume, signifying a confirmed breakout. Bitcoin's current position above this level suggests growing interest from buyers.
The presence of a double bottom pattern typically suggests that sellers are losing control. Once buyers intervene to defend the second low, the market often shifts direction. If the current momentum persists, a move towards $112,000 could materialize.
Despite the promising technical setup, CryptoQuant cautionedly advises users that no pattern is absolute. A breakout, even one backed by volume, still necessitates confirmation over time.
In spite of the potentially bullish outlook, "Double bottoms are where the market say: 'We've sold enough.' When buyers defend the second bottom, it sends a message: Now it's our turn. But remember, not every pattern plays out. Know your risk, make your decision," CryptoQuant asserts.
With the price hovering in a key decision zone, the breakout level's strength as support will be crucial. If it remains robust, bulls might continue pushing higher. Conversely, if it falters, the market could revert to its previous range.
CryptoQuant also issues a note of caution to those eager to capitalize on the pattern. Traders should treat patterns like maps - helpful but not guarantees. As the analysis suggests, "Patterns are like maps - they show you the way, but you're the one driving. Those who move with patience, discipline, and a plan will be the winners."
As of this writing, Bitcoin trades at $109,711 according to CoinMarketCap data.
[1] The double bottom pattern is formed by two lows at similar levels, separated by a neckline. The breakout above this neckline with strong volume indicates growing bullish momentum.[2] The target for the price based on the double bottom pattern is around $112,000.[3] If the support levels hold, a move towards the target price is likely.[4] Caution is advised as no pattern is absolute, and confirmation over time is required.
[1] As the price of Bitcoin hovers above the double bottom pattern's neckline, it indicates growing bullish momentum, with a potential target at around $112,000.
[2] In the current situation, the strong trading volume during the breakout above the neckline reinforces the belief that the market might be shifting direction towards the predicted target price.
