Analyst and trader Kevin Svenson is leaning bullish on Bitcoin (BTC) as the flagship crypto asset breaks out from a bullish reversal structure.
In a video update, Svenson tells his 79,800 YouTube subscribers that Bitcoin appears to have formed a falling wedge pattern on the four-hour chart.
A falling wedge formation is a bullish reversal pattern suggesting that a leg up is in sight amid declining seller momentum.
According to Svenson, the completion of the falling wedge pattern could mark a local bottom for Bitcoin.
“As long as the stock market remains stable, I think Bitcoin should be near completion of this pattern, you know, maybe we go lower. But in theory, if that was the low you know, Bitcoin could see a pretty nice recovery if you extrapolate the falling wedge, giving us a fairly nice bounce to recover from this range.”
At time of writing, Bitcoin is trading for $62,718, indicating that BTC has broken out of the falling wedge pattern.
But the cryptocurrency analyst and trader says that Bitcoin needs to keep making higher lows on the daily time frame to keep the chances of a sustained recovery alive. According to Svenson, a break of a crucial level would trigger another sell-off event.
“So the lowest I would want to see Bitcoin go is around $57,000. We can still hit that trend line but if we break down, I mean that’s where things get you know a little bit treacherous. Because it opens us up to swing back into where all these wicks were, which would likely drive the price down to a major low again before getting a bounce.”
Looking at the trader’s chart, he seems to suggest that Bitcoin will confirm the recovery after trading above $62,000 with a price target just below $90,000.
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