Bitcoin at guide line/support

An ascending channel is a bullish chart pattern that is formed when an asset’s price moves between two parallel trendlines that are sloping upward. These trendlines act as support and resistance levels for the asset’s price, and the pattern is considered a bullish signal because the asset’s price is consistently moving higher within the channel.

Dynamic support and resistance levels are important in analyzing the ascending channel pattern because they indicate the levels at which buying or selling pressure is likely to occur. These levels can change over time as the market’s sentiment and the asset’s fundamentals change.

Real support and resistance levels, on the other hand, are levels that have been tested and proven to be significant in the past. They are based on past price action and are often used as key levels for setting stop-loss orders or taking profits.

An ascending channel is a strong bullish pattern, and it is considered a continuation pattern as it indicates that the price is likely to continue moving higher within the channel. Traders can use dynamic support and resistance levels to identify potential entry and exit points, and real support and resistance levels to set stop-loss orders and take profits.

In summary, an ascending channel is a bullish chart pattern formed by two upward sloping parallel trendlines that act as support and resistance levels. Dynamic support and resistance levels indicate where buying or selling pressure is likely to occur, while real support and resistance levels are levels that have been tested and proven to be significant in the past. Traders can use these levels to identify potential entry and exit points, and set stop-loss orders and take profits.

Bitcoin longtime ascending channel
Figure: Bitcoin longtime ascending channel.

 Bitcoin, the world’s first and largest cryptocurrency by market capitalization, has been on an upward trend in the long-term. This trend has been driven by a number of factors, including increasing mainstream adoption and institutional investment, as well as the halving event that occurs every four years.

 The halving, also known as the “halvening,” is a pre-programmed event built into the bitcoin protocol that reduces the rate at which new bitcoins are created by half. This happens approximately every four years and the next halving is expected to occur in 2024. This reduction in the supply of new bitcoins exerts upward pressure on the price, as the reduced supply and constant demand causes the price to increase.

The first halving occurred in 2012, when the block reward for miners was reduced from 50 bitcoins to 25 bitcoins. At the time, the price of bitcoin was around $12, and it took nearly two years for the price to reach its next all-time high of $1,242 in November 2013.

The second halving occurred in 2016, when the block reward was reduced from 25 bitcoins to 12.5 bitcoins. At the time, the price of bitcoin was around $650, and it took approximately 18 months for the price to reach its next all-time high of $19,783 in December 2017.

 Currently, the bitcoin is trading at around $20,000, and many analysts believe that the next halving in 2024 could have a similar effect on the price, potentially pushing it to new all-time highs.

 However, it is worth noting that while the halving can be a bullish indicator, it is not the only factor affecting the price of bitcoin. Other factors such as regulatory developments, security breaches, and market sentiment can also have a significant impact on the price.

 Moreover, it is not guaranteed that the price of bitcoin will increase after the halving. The price could also fall if the market sentiment is bearish or if there is a lack of demand for bitcoin.

 In summary, bitcoin has been on an upward trend in the long-term, driven by a number of factors including increasing mainstream adoption and institutional investment. One of the key factors that has driven this trend is the halving event that occurs every four years, reducing the supply of new bitcoins and exerting upward pressure on the price. The next halving is expected to occur in 2024, and many analysts believe that it could push the price of bitcoin to new all-time highs. However, it is important to note that halving is not the only factor affecting the price of bitcoin and other factors such as market sentiment also play a role.

It is important to explain, at the level of technical analysis, a bullish channel, in addition to supports and resistances, has “parallel guides”, of those supports and resistances lines, where the price stops many times, without touching the supports or resistances. When it does not reach real resistance, the price indicates a lack of strength in continuation, many times. In the same way, when the price does not go down to the support and is supported by the guiding parallel, it means that the price has gone down, but it could not go down much more and start a new bullish movement of continuation.

It is very possible that the bitcoin price could be developing a similar situation at the moment. Beginnings of the upward turn without approaching the support of the large bullish channel, but rather support at the guide line/support.

KEEP IN TOUCH & SUBSCRIBE TO OUR MARKET NEWS