The cost of buying one Bitcoin token can be as high as $ 22,000 in the fourth quarter.
That is possible if a technical indicator from the textbook emerges as usual. The pattern is called ‘Rising Wedge’ and contains the history of 63 percent of all times. It is formed when an asset is trading upward within a structure bounded by two upward converging trend lines.
Bitcoin trades in a similar. Over the past two weeks, the flagship cryptocurrency has formed a series of higher highs and higher lows, creating a structure similar to a Rising Wedge. Halfway through the pattern, it now expects to continue higher unless it hits the top or gets closer. And once it does, it expects to undergo a turnaround.
Bitcoin is trading inside a Rising Wedge pattern. Source: BTCUSD on TradingView.com
The alphabets in the chart above show the BTC / USD rebounds and withdrawals from the rising wedge trend lines. The pair is now waiting to return from D to E, followed by a pullback from E to F. BTC / USD may attempt to break down below F. But if that doesn’t happen, the pair would bounce back to E # .
The two trendlines converge near E # – the pinnacle – which is $ 21,594. That said, the Bitcoin price could trade as high as the stated level, with a psychological tendency to test $ 22,000.
The wedge goal
The maximum gap between the top and bottom wedge trendline is USD 3,300. Technically, the breakout reversal after Bitcoin peaks could bring the price down by at least USD 3,300. That brought Bitcoin’s downward target close to USD 18,357.
Meanwhile, if BTC / USD manages to break lower before it reaches the top, it automatically shifts the Wedge target below $ 18,357. For example, the pair could close below the Wedge’s lower trendline today when trading at $ 19,142 and crash towards $ 15,842 ($ 19,142 – $ 3,300).
Fundamentally, the odds of Bitcoin testing $ 22,000 is higher due to growing adoption by mainstream institutions. They sit on top of a big pile of cash reserves and can eventually buy Bitcoin to protect themselves from one declining US dollar. That’s the same strategy that companies like MicroStrategy and Square have followed.
Billionaire investors Paul Tudor Jones and Stan Druckenmiller have also bought Bitcoin as a hedge.