Bitcoin has broken out of a Falling Wedge Pattern on the daily timeframe, signaling a bullish reversal that aligns with the broader market sentiment. Letโs examine this setup in detail, from pattern recognition to key support/resistance levels and trade planning.
๐ง Pattern Analysis โ Falling Wedge Formation
The chart displays a textbook Falling Wedge, which is a bullish chart pattern that typically forms after a downtrend. Itโs characterized by converging trendlines sloping downward, showing a slowdown in bearish momentum and a potential reversal point.
Formation Period: This wedge developed over a multi-week period (FebโApril 2025).
Structure: Each swing high and swing low forms lower highs and lower lows inside the wedge.
Breakout Confirmation: Price has decisively broken above the upper trendline of the wedge, validating a potential bullish continuation.
๐ Falling Wedge patterns are often seen near the end of a corrective move and suggest accumulation before a rally.
๐ Key Technical Zones
๐ธ Resistance Zone (~$103Kโ$105K)
This area has historically acted as a strong resistance zone.
Price is currently consolidating just below this region, indicating a possible breakout retest or a temporary pause before the next leg up.
๐ธ Trendline Support
A new rising trendline has emerged post-breakout, acting as dynamic support.
Price has respected this trendline multiple times, forming higher highs and higher lows โ a strong bullish signal.
๐ธ SR Interchange Zone (~92Kโ$94K)
Previously acted as resistance; now flipped to support.
This makes it a critical level where bulls may defend positions, and a good place for a stop-loss.
๐ธ Support Zone (~$75Kโ$78K)
Major historical support area where the wedge bottom formed.
Buyers stepped in aggressively in this zone during the final leg of the wedge.
๐ฏ Trade Plan
This setup offers a clearly defined risk-reward profile based on breakout trading principles.
๐ Entry Idea:
Current consolidation near resistance offers two entry strategies:
Aggressive Entry: Near current price, anticipating breakout continuation.
Conservative Entry: On a confirmed breakout above $105K or a pullback to trendline support around 98Kโ$100K.
โ
Target: $112,116
Measured by projecting the height of the wedge from the breakout point.
Also aligns with a previous key structural high, adding confluence to the target.
โ Stop Loss: $93,294
Strategically placed just below the SR interchange zone and rising trendline.
Protects against potential fakeouts or trendline breaks.
๐ Risk Management
Risk/Reward Ratio: ~2:1 or higher depending on entry point.
Always use proper position sizing.
Be prepared to cut the trade if price closes below trendline and SR zone on high volume.
๐ฎ Outlook and Strategy
This breakout suggests Bitcoin may be entering a renewed bullish phase. If macro conditions remain favorable and price sustains above key support zones, we could see continuation toward the $112K region.
However, itโs important to monitor:
Volume: Watch for rising volume on any breakout above the resistance zone.
Market Sentiment: External factors (e.g., news, ETF flows, regulatory updates) may influence the move.
Trendline behavior: A break and close below the rising support line may invalidate the setup.
๐ฌ Final Thoughts
This is a technically clean setup combining a bullish pattern breakout, supportive structure (trendline & SR zones), and a logical target based on classical charting. If Bitcoin maintains current momentum, traders may see significant upside in the coming weeks.