After the sudden spike in prices seen across the entire market last week, it seems like most cryptocurrencies entered a consolidation phase. Now, Bitcoin, Ethereum, and XRP appear to be bound for a significant move in the next few days.
On the long-term perspective, Bitcoin is consolidating within a descending parallel channel that formed since Sept. 26. Since then, every time this cryptocurrency reaches the bottom of the channel, it bounces off to the middle or the top. But, when it reaches the top, it falls back to the middle or the bottom.
At the moment, BTC is trading around the top of the channel after last week’s 40 percent upswing. This price level represents a pivotal point for Bitcoin’s trend.
A breakout of the descending parallel channel would be followed by a strong bullish impulse that could take this crypto to around $16,500. The 70 percent target to the upside is given by a significant bull flag that has been developing since late March. This is considered a continuation pattern that formed after Bitcoin surged to nearly $14,000, known as the flagpole, and was succeeded by the current consolidation period, known as the flag, which could result in a breakout in the same direction of the previous trend.
Nevertheless, if Bitcoin fails to break outside of the descending parallel channel, it would likely retrace to the next level of support around $8,500. An increase in the selling pressure behind BTC could prolong the consolidation period and trigger a move down to the bottom of the channel that sits at $6,600.