bitcoin price Now in a flash it is $6,000 above yesterday’s lows. A long wick is now trailing below the support, forming a Japanese candlestick formation called the Dragonfly Doji. With already massive follow-through by crypto bulls, a daily close above $36,000 could reverse a reversal pattern on the charts.
But how high can a once trending cryptocurrency climb if it can get down? And is this a dead cat boom, or a bull market waiting for the public to make a full recovery?
Will the Daily Dragonfly Doji Let Bitcoin Fly Again?
Although so many investors in cryptocurrencies are quick to write technical analysis As in witchcraft or little more than a guessing game, it has a real technique.
When done properly, there are strict rules to be followed for data-confirming signals that show what kind of outcome is expected from the behavior. has been studied on chart pattern, indicators, and more – up to candlesticks.
Related Reading | What the Final Stage in a Bitcoin Bull Market Could Look Like
study of japanese candle It’s as basic as it gets, but that doesn’t diminish its effectiveness. The open, close, low and high of each candle can provide all kinds of information about the market and what to expect.
For example, the Dragonfly Doji on the Bitcoin daily chart is in itself sufficient to suggest a reversal. And with the upside today, a more prominent reversal pattern is also forming.
A dragonfly doji could lead to the completion of a reversal pattern | Source: BTCUSD on TradingView.com
What a reversal pattern could mean for crypto
with an everyday dragonfly doji pattern, and a td9 buy signal On the weekly time frame, bitcoin bulls just need to hold off until Sunday night’s weekly candle closes and a reversal will be more likely.
The dragonfly doji mentioned above is a . is the focal point of Morning Star Reversal Pattern in making. If the bulls can close today’s daily candle and extend further to tomorrow, a more broad move is likely.
Resistance at $40,000 and $48,000 could act as potential stopping points before a retest of $50,000. Above $50,000 should result in a retest of previous highs and if they break, the bottom of this bull market correction will be set at $30,000.
At that point, it would be time to turn to trying Capture the top of the market cycle, wherever it ends. And it could all start with the Dragonfly Doji on the daily time frame.
Featured image from iStockPhoto, Charts from TradingView.com