Crypto May Be Gearing Up For Another Sharp Move

After plummeting in the spring, BitcoinBTC
and other cryptocurrencies have traded in a very tranquil manner from mid-June until the present time. Though crypto bulls are undoubtedly relieved to see their holdings stabilize rather than plunge, there are several chart patterns forming that indicate that another major move may be imminent.

According to Bitcoin’s daily chart, a descending triangle appears to be forming. Descending triangles are typically bearish chart patterns – especially when they occur after a major downtrend. If Bitcoin breaks down from this pattern on strong volume, further declines are likely ahead. If Bitcoin breaks the pattern to the upside, however, that would negate the bearish implications of the descending triangle and could portend a bounce.

The weekly Bitcoin chart puts the recently forming descending triangle pattern into better perspective. The descending triangle pattern is forming between the $30,000 resistance level and the $10,000 support level. If Bitcoin breaks down from the pattern, $10,000 is the next support level that it will likely try to shoot for. If Bitcoin breaks to the upside, on the other hand, it may attempt to test the $30,000 resistance level.

There is a similar chart formation developing in EthereumETH
, which is further confirmation of the pattern that is forming in Bitcoin:

A similar chart pattern is also forming in LitecoinLTC
:

To summarize, Bitcoin and other major cryptocurrencies are likely experiencing a period of eerie calm before a storm. In financial markets, it is common for important moves to be preceded by periods of tranquility — a phenomenon known as a volatility squeeze. The ultimate breakout — whether down or up — should ideally be confirmed by all of the major cryptocurrencies, along with heavy trading volume, to increase the probability of a good signal. I will be watching closely.

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