Bitcoin Price Action

Bitcoin has had a pretty crazy ride over the last few years. After surging higher to around $20,000, the price subsequently dropped all the way back to around $3150, and is now sitting somewhere in the middle of these two extremes at around $10,200.

If you look at the daily price chart of this particular cryptocurrency, you can see that there is a real air of uncertainty surrounding it right now:

You can see from the trendlines marking the high and the low points that the price has been trading in a descending triangle in recent months, which basically means that it has been trading in an ever decreasing trading range.

The significance of this is that when the price of Bitcoin eventually breaks out of this descending triangle, which it has to do at some point, there is likely to be a strong breakout either upwards or downwards.

Breakout Price Targets

If there is to be an upward breakout, the price of Bitcoin is going to need to move strongly above $10,600, and close decisively above the upper trendline.

Similarly, if there is to be a downward breakout, the price is probably going to need to close below $9500 based on the current trendline level.

With regards to price targets, it is almost impossible to predict how far the price of Bitcoin could go, regardless of which direction the breakout is.

You would think that $8000 would be easily within range if there is a downward breakout, while the price could easily test the previous highs of 2019, and possibly push on even further to $15,000 and beyond if there is an upward breakout.

Final Thoughts

The point is that although Bitcoin seems to be fairly dead right now in terms of daily price movements, it could soon kick into life if the price breaks out of this descending triangle.

You can be sure that many traders and analysts are aware of this triangle and are eagerly anticipating a possible breakout, and so when there is a big price move in either direction, there is likely to be a lot of momentum behind any breakout.

I myself am not really a trader of cryptocurrencies, but I just thought I would alert people to this particular trading pattern because these descending triangle breakouts can be very profitable when they occur.

Please remember that Bitcoin and other cryptocurrencies are highly speculative instruments, and it is possible to lose all of your capital.