Why the Latest Bitcoin Dump Could Actually Launch the Crypto Market into Bullish

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The bitcoin price on Wednesday depreciated as much as 2.56 percent on the back of a stronger US dollar. Paradoxically, that might not be such a bad thing for the crypto market.

The bitcoin-to-dollar exchange rate (BTC/USD) bottomed at $3,340 on an intraday basis, while retesting the low of January 29 trading session. There was a little attempt from bulls to reverse the price action with the bearish bias intact. Nevertheless, the pair consolidated above $3,340, which served as an opportunity to reclaim $3,400 in the near-term
In our previous analysis published Monday, we had predicted a bitcoin dump as the cryptocurrency’s volatility and volume went lower than normal. We also noted a strikingly similar pattern between bitcoin’s current and previous price actions. In this analysis, we aim to elaborate on the same to predict where the next bitcoin move could be.

Source:ccn.com

In the Coinbase chart above, we can see bitcoin trending lower inside a falling wedge formation. Inside the wedge, the price consolidated inside a small symmetrical triangle (1). It attempted a breakout that eventually failed to blossom. The price reversed and formed a large bear flag, then continued to consolidate again inside a new symmetric triangle (2). The price action repeated four times, excluding the current scenario (6) which has yet to mature
As period 6 develops, bitcoin could form a smaller symmetrical triangle as it attempts to retest the falling wedge resistance to the upside (depicted as a dotted falling trendline). Meanwhile, the price would keep pressure on $3,430 to remain its interim resistance. Based on the previous price actions, bitcoin should continue its downside momentum. However, as we are reaching the apex of the falling wedge, the price should technically attempt a strong upside breakout action.