Crypto Index analysis: recovery expected to continue
11:39, 6 October 2020
The Crypto Index has continued its recent recovery, following an early month sell-off over the BitMEX exchange news, with a brief drop below the 50,000 support level.
Crypto Index analysis shows that multiple wedge patterns are forming, suggesting that a powerful technical breakout is on the horizon.
Crypto Index medium-term price trend
The crypto index has remained capped below its key 200-day moving average for over one month now.
Crypto Index technical analysis over the medium term shows that the index is trapped inside a massive broadening-wedge pattern.
According to technical analysis, the wedge pattern is now located between the 43,000 and 77,000 levels.
Until the index starts to stabilize above its 200-day moving average, then the chances of the price reaching the bottom of the mentioned wedge pattern are high.
If bulls can manage a recovery above the 200-day moving average, around the 57,000 area, then the chances of a rally towards the top of the wedge are dramatically increased.
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Crypto Index short-term price trend
Crypto Index analysis highlights that the index only has a bullish short-term trading bias while the price trades above the 55,000 level.
The one-hour time frame shows that an ascending broadening wedge pattern has recently formed, and is located between the 50,000 and 57,000 levels.
Typically, ascending broadening wedge patterns are considered to be bullish reversal patterns.
According to the size of the bullish price pattern, the crypto index could rally towards 64,000 area over the short-term if bulls can force a breakout above the 57,000 level.
Overall, watch out for rally in the crypto index over the short-term if bulls can anchor the price above the 57,000 level.
Crypto Index technical summary
Crypto Index technical analysis highlights that bulls need to need to reclaim the 57,000 level to encourage a rally towards the 64,00 to 77,000 area.
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