Bitcoin price hit the $ 46,000 mark for the first time in months a few hours ago after seeing its worst sell-off ever in the second quarter. The boost has continued beyond the end of the week – a crucial closing point that left an extremely bullish battle cry.
The pattern known as the “Three White Soldiers” is often a sign that a strong uptrend is brewing – but it is often accompanied by a semblance of weakness. Here you can learn more about the potentially important pattern and what it could mean for the current crypto market cycle.
Bitcoin bulls prepare for battle
Bitcoin price recently hit an uptrend after scratching the $ 30,000 support for weeks. The bears’ repeated failure to drive prices down gave the bulls confidence to recover nearly 50% from highs reached earlier in the year.
The three-week uptrend, confirmed by yesterday’s weekly close, has created a bullish Japanese candlestick pattern labeled “Three White Soldiers”.
According to Investopedia, Three White Soldiers “indicates a strong change in sentiment in the market” and is characterized by three similarly sized candles in a row. It is “important to note that the strong upside moves could temporarily create overbought conditions,” the website continues.
If the pattern is correct, there could be a short-term setback followed by an explosive uptrend. A similar pattern occurred almost a year ago to the day. The result: nine months of the strongest upward trend Bitcoin has ever seen.
“Three black crows” example in crypto: with and without a trap
A slump similar to that of the bear trap in August 2020 would set the Bitcoin price back to around $ 35,000 before skyrocketing and possibly reaching the final leg of the bull run.
The bears might not get their short-lived trap this time either. As with most chart patterns, every up signal has an opposite down signal. The counter-signal to the Three White Soldiers is called “Three Black Crows”.
Three Black Crows surfaced prior to crashing to the bottom of the bear market, and the same signal surfaced again at the June 2019 high at around $ 14,000 per BTC.
There was no retracement in the first scenario and Bitcoin just fell like a ton of bricks through the support. In the second scenario, a bull trap and a retest of over 40% occurred in October 2019. The movement broke the record for one of the largest daily movements in history. However, they did not manage to break through the resistance level and recapture it as support.
After another failure, Bitcoin price dropped to its bear market low on Black Thursday 2020. If the two bullish signals (Three White Soldiers) alternate on the retracement as well, there could be no bull trap and instead the cryptocurrency breaks the resistance as easily as the support fell in December 2018.
Proof of text: Newsbtc
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