The 4-hour Bitcoin chart showcases a compelling shift in market dynamics. After a significant upward breakout from a bullish wedge pattern, the subsequent corrective move has evolved from a partial Cypher pattern into a completed bullish Shark harmonic pattern. This sequence highlights the market's search for a strong support level, which it appears to have now found.
The Bullish Wedge Breakout and Initial Correction
The analysis begins with a confirmed breakout from a multi-week bullish wedge pattern. This move signaled a powerful shift in momentum, with the price successfully pushing above the upper trendline and then returning to retest it as a new support level. This retest is a textbook move, validating the breakout and confirming the strength of the bullish trend.
However, the corrective move downward has been deeper than initially anticipated.
The Failed Cypher and the Emergence of the Bullish Shark
As the price retested the wedge's upper trendline, it began to form a bullish Cypher pattern, with its projected reversal point at the 0.786 retracement (Point D). Initially, this point provided a brief bounce, but the support quickly failed, and the price continued to fall.
This failure is not a sign of market weakness but rather a common occurrence where a less-than-perfect harmonic pattern fails to hold and morphs into a different one. The price continued its decline to the 0.886 Fibonacci retracement level, which is the critical reversal zone for a bullish Shark pattern. This level is now identified as Point C of the Shark.
The formation is now complete, with the original Cypher's Point D becoming the new Shark's Point C, and the price reaching the key reversal level that traders now expect to hold.
Confluence and Outlook
The current price action represents a powerful confluence of support:
Bullish Wedge Retest: The price is resting on the upper trendline of the recently broken bullish wedge.
Bullish Shark Pattern: The price has completed the final leg of the Shark pattern by reaching its reversal zone (Point C).
The combination of these two events creates a high-conviction setup for a significant bounce. The market has found a powerful support level where selling pressure is expected to be exhausted. Traders will now look for a confirmation of this reversal with a strong green candle and a surge in volume, which could mark the beginning of the next major upward move for Bitcoin.
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