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Bitcoin forecast to rally towards $40k amid bullish pattern

EditorVenkatesh Jartarkar
Published 11/12/2023, 08:19 AM
© Reuters.

Investors in the cryptocurrency market are eyeing a potential uptick in Bitcoin's value following a robust technical analysis that indicates an ongoing bullish trend. The world's leading digital currency has staged an impressive rally over the past two months, climbing from $25,000 to $38,000. This upward trajectory is supported by high investor confidence and a period marked by a lack of significant news events that could adversely affect market sentiment.

Technical analysts have identified an inverted head and shoulders pattern on Bitcoin's 15-minute timeframe, which is traditionally seen as a predictor of trend continuation. This pattern has led to predictions that Bitcoin could soon approach the minor resistance level of $37,185. Should it surpass this threshold, the next target is the major daily resistance level at $40,000.

A trading strategy has been proposed for those looking to capitalize on this momentum. It involves entering a long trade at the aforementioned minor resistance level of $37,185 with a carefully placed stop loss at $36,272 to manage risk. The strategy outlines multiple take-profit levels set at $38,000, $39,000, and $40,000 over the forthcoming 1-3 weeks as part of a secure profit-taking approach.

The recommended trading plan emphasizes a risk-to-reward ratio of 1:3. This means that for every potential dollar at risk, there is an opportunity to earn three in profit. The maximum profit potential for this strategy is capped at 7.5%, while the maximum loss is restricted to 2.4%, making it an attractive proposition for traders relying on technical analysis for their market decisions. With these strategic points set in place, investors and traders will be closely monitoring Bitcoin's price movements in the coming weeks.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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