The headline of this article will make more sense upon its conclusion. For now, put it behind you and follow along.
It seems the speculation in the blockchain space has reached a fevered pitch (but it hasn't translated to actual market volume for Bitcoin or any other cryptocurrencies).
Bitcoin's infinite consolidation cycle that it appears to be in.
But before we get into that, let's look at Bitcoin from a more 'larger picture' perspective for a second.
Looking at Bitcoin 'Zoomed Out'
Check out this chart below:
That peak you see in the chart above? Yeah, that's the December 2017 ATH.
Follow the trajectory of that line and you'll see that Bitcoin nudged against that long, long overhead resistance just a few weeks ago.
And it failed to break it.
Taking a Closer Look
If we zoom in even closer, we can see that the price literally nudged that diagonal overhead resistance before plummeting straight downward.
Curiously, this rejection at the overhead resistance for Bitcoin occurred on June 1st (nice and clean at the beginning of the month for us).
Danger: Potential Rising Wedge Formation Emerging on Bitcoin's Chart
Take a look at this breakdown below of Bitcoin's candle formation:
What is a Rising Wedge Formation?
A 'rising wedge' is a bearish chart formation that is characterized, in essence, via the pattern that we see above.
Quick Educational Reference
A great reference point for more detailed information about rising wedge patterns can be found here: https://school.stockcharts.com/doku.php?id=chart_analysis:chart_patterns:rising_wedge_reversal
Pay special note to the examples that are given on 'stockcharts' (very reliable website with a lot of great trading information / education):
Below Are a List of Attributes to Look For When Attempting to Confirm Whether a Suspected Pattern Really is a Rising Wedge or Not (note, a failure to meet all of the criteria listed below does not necessarily rule out the possibility, in itself - every case is unique - and the most important thing here is to forecast future price action vs. litigate over what chart pattern may or may not be emerging)
What We Should Watch For
Whenever the price of Bitcoin starts nearing that bottom parallel line.
As seen in the example provided above, the rising wedge formation is a bearish reversal.
That means that it typically occurs during a bullish trend in price and, upon completion, signals a change in trend (flip to bearish).
The 'flash point' for this formation usually occurs when the price breaks below the lower parallel bar of the diagonal channel (see below):
The picture above provides enough explanation.
Possibility For a Bounce
There's no exact science for forecasting when the break will happen - but the goal here is merely to recognize the chart formation when it occurs in the wild, and remain vigilant for the tale tell sign of price collapse (which typically occurs once the price falls below that bottom balance beam support point).
Wrapping Up Here
This is a good place to wrap up, because the price is leaning right against this bottom support point - so we're best served by merely observing and then acting accordingly afterward.
Attempting to place a position pre-emptively as Bitcoin's price is in such a precarious position (a bounce could cause overextended bears to suffer), would be foolish - to say the least.
Looking forward to returning back to this within the next day or so (hopefully).