Bitcoin Price Outlook: BTC/USD Rebound Or ‘Dead Cat’ Bounce?

Bitcoin (BTC/USD) has ping-ponged back and forth over recent trading sessions in search of its next big move. The cryptocurrency now looks coiled into a tightly wound spring as BTC/USD price action fluctuates between two converging trendlines. This brings to focus potential for Bitcoin volatility to accelerate following a breakout from the pennant pattern that appears to have formed.

BTC/USD – BITCOIN PRICE CHART: DAILY TIME FRAME (25 FEBRUARY TO 01 JUNE 2021)

BTCUSD Price Chart Bitcoin Forecast

Chart by @RichDvorakFX created using TradingView

Bitcoin bulls and bears have been clashing over where the crypto heads next as price action consolidates following a -50% selloff from all-time highs. A string of higher lows are forming from rebound efforts off the $30,000-price level, but this is mired by consecutively lower highs amid prevailing downward pressure. As such, it is worth keeping in mind that one distinct characteristic of a pennant pattern is the ‘flagpole’ that precedes the pennant. It is also important to remember this chart pattern, generally speaking, indicates strong potential for a continuation of the recent trend (i.e. direction of the flagpole).

BTC/USD – BITCOIN PRICE CHART: WEEKLY TIME FRAME (10 FEBRUARY 2020 TO 01 JUNE 2021)

BTCUSD Price Chart Bitcoin Forecast

Chart by @RichDvorakFX created using TradingView

BTC/USD price outlook thus seems to leave the cryptocurrency at risk of extending lower in the short term. This bearish scenario could warrant more credence if Bitcoin bears can invalidate ascending trendline support. That said, the $30,000-price level looks like a formidable layer of defense and may help keep BTC/USD afloat. Failure to maintain this area of support likely exposes the $17,000-handle underpinned by the 78.6% Fibonacci retracement level of Bitcoin’s March 2020 to April 2021 trading range. If Bitcoin can overcome nearside technical resistance with a close above the $40,650-price level, however, this might open up the door for bulls to make a push toward $50,000.

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