The two crypto leaders appear to have correlated movements by market capitalization. Although Ethereum (ETH) is more bullish than Bitcoin (BTC), they are both in rising wedges. A well-recognized chart pattern that usually precedes a decline.
Bitcoin (BTC) and Ethereum (ETH): Nearing the end of the rising wedge compression?
BTC and ETH charts show the same very clear chart pattern: the rising wedge. This figure appears as a narrowed, upward-sloping channel. Most of the time, it happens in an uptrend, and before its continuation.
But in the case of these two cryptos, the figure appears after a strong downtrend. This figure may indicate the weakness of the sellers who can no longer generate a strong downward impulse. This leaves room for buyers, who are starting to gain strength.
But there is an even more plausible explanation for these rising wedges on Bitcoin and Ethereum. The Bears are starting to liquidate their short positions. This is because the price of these digital assets is reaching significant areas. What are these areas? Around $19,500, the 2018 high for Bitcoin (BTC), and $900 for Ethereum. Therefore, a pattern like this wedge causes sellers to exit the market.
Which case is more likely?
Does this rising wedge signal the end of the long bearish trend on Bitcoin and Ethereum? Or is it just a figure that confirms the continuation of the decline?
According to Tagado Bitcoin’s tweet, this figure is generally bearish. Therefore, the second case is the most likely. In fact, based on historical data, the price tends to break down such a figure.
Therefore, it would be worth opening a short position on Bitcoin and Ethereum, after this rising bar.
If we look closely, we can see that each triangle directs the price of these two cryptos towards resistance. For Bitcoin, the top of the rising wedge is found around $25,500. For Ethereum, the triangle leads it towards $2,100. Selling opportunities? We will remain vigilant.
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