- Bitcoin price was quickly rejected after rising to a new all-time high.
- However, the downward price action does not mean that the uptrend reached exhaustion.
- If BTC now consolidates for four days, the odds will drastically increase for another upswing.
Bitcoin left a price gap on the Chicago Mercantile Exchange (CME) as it rose to a new all-time high of nearly $62,000. The recent downswing that pushed BTC below $55,000 helped fill this gap. Now, the pioneer cryptocurrency could be preparing to rush into new highs.
Bitcoin price may consolidate before it makes the next move
Pullbacks following significant bullish impulses do not necessarily signal that the bulls are losing control over the price action. Often, breakouts quickly retest key support levels as sellers re-enter the market to lock in profits.
A pattern that commonly emerges is the Shake-out Plus 4, which develops following important upward price action. Assets tend to then quickly sell-off, taking price back into the base before a sideways to slightly down drift materializes. Such marker behavior helps shake out the so-called “weak holders.”
If the selling pressure remains muted, prices usually rebound and take out the most recent swing high within four trading days. Otherwise, it signals that the reversal was more meaningful.
Moving forward, Bitcoin holders should hold their positions and allow prices to form a Cup formation during the four days. The 1.382 extension level at $64,231 and then the 1.618 extension level at $67,854 could serve as targets if Bitcoin is able to rebound. Both extension levels relate to the base formed since the February high.
BTC/USD Daily chart
It is worth noting that if Bitcoin price accelerates to the downside and extends beyond four days, investors should look to the $47,100 level as support. It closely intersects with the 50-day simple moving average (SMA) at $46,556.