Bitcoin price has been flying over the last few weeks, ever since the cryptocurrency broke free from its tight trading range and took out $10K resistance. Within days, the cryptocurrency found itself trading over $12,000, where it has failed to hold thus far.
For bulls to keep the momentum going, this weekly close is especially critical. Here’s why, along with which levels bulls must defend on weekly and monthly levels for the rally to continue.
Minor Crypto Market Correction, Or At Risk of Reversal?
The leading cryptocurrency by market cap spent nearly three full months consolidating before taking out resistance at $10K. The key level, as expected, triggered widespread FOMO across the crypto market and helped altcoins break out into explosive rallies of their own.
Bitcoin has started to pull back, among one of the most significant corrections since the uptrend began back in March. The cryptocurrency has increased in value by over 230% from Black Thursday lows and is gearing up for a new long-term uptrend.
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But before that can happen, bulls must defend current levels and ensure the weekly candle doesn’t close as a bearish reversal pattern.
BTCUSD Weekly Evening Star Doji Reversal Pattern | Source: TradingView
Bitcoin Weekly, Monthly, And More At Risk Of Evening Star Doji Pattern
Bitcoin price action as of this week pushed the cryptocurrency to a yearly high of $12,400 before a rejection took the asset down by nearly $800. The crypto asset is now making another attempt to get back above $12,000 – something that bulls must achieve to ensure that the weekly candle doesn’t close with an ominous pattern.
If BTCUSD closes at current levels, the cryptocurrency is at risk of erasing much of its recent gains thanks to an evening star doji pattern forming on weekly timeframes.
BTCUSD Weekly Rising Wedge Pattern | Source: TradingView
Coinciding with the bearish candlestick reversal signal is a large rising wedge structure with a top trendline dating back from Bitcoin’s bear market bottom. Zooming out, the trendline appears even more significant, connecting more than one long-term Bitcoin bottom.
Bulls will need to close above $12,200 to eliminate the risk of such a reversal playing out. If bulls manage to prevent collapse before this weekly close, they will still need yet another week of a strong finish.
BTCUSD Two-Week TD 9 Sell & Evening Star Doji Reversal Pattern | Source: TradingView
On two-week timeframes – a not often used segment – the TD 9 sequential indicator is calling for a top in BTCUSD. Zooming out, the TD 9 on two-week timeframes has called nearly every major top in Bitcoin – most recently the top last year in June 2019.
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Beyond that, just a day after the two-week close, Bitcoin price will face its August monthly candle close, where it also risks closing with the same reversal candle. A monthly close below $11,250 will form the evening star doji candle across the important high timeframe segment.
BTCUSD Monthly Evening Star Doji Reversal Pattern | Source: TradingView
With so much on the line, bulls will need to push hard to show the world that the next crypto bull run is ready to begin. Otherwise, bears will regain control and keep crypto under wraps a bit longer.