As the situation between Israel and Iran intensifies, ripples are being felt in the global markets, including the cryptocurrency sphere. This escalating geopolitical tension is driving investors towards a more cautious approach. In parallel, the Bitcoin’s trading chart is presenting a complex picture, signaling a potential breakout in either direction.
Although Bitcoin attempted to regain the $110,000 mark earlier this week, it slipped below the 21-day moving average. Despite this, it remains above the 50-day moving average support level. The convergence of these moving averages, along with a distinct trendline resistance, has pushed Bitcoin into a descending triangle pattern with a tightening price structure.
A cryptographer on platform X notes that Bitcoin is forming a descending triangle pattern on its daily candlestick chart. As per technical analysis principles, this setup often indicates bearish trends. The associated chart image depicts repeated rejections from a downward trendline that commenced when Bitcoin hit a new peak of $111,814 on May 22. The base of the triangle, however, has remained constant with a support zone around $102,000.
The 21-day moving average (21MA), illustrated in blue, is applying downward pressure, acting as resistance, while the 50-day moving average (50MA), shown in green, is providing temporary support. As the price action continuously narrows within this triangle, the market is set for a decisive move. The direction of this breakout will likely determine the next significant trend.
The ongoing Israel-Iran conflict could be the catalyst that pushes Bitcoin out of its current range. Notably, the crypto market experienced a surge of liquidations following the news of an Israeli airstrike on Iran. Bitcoin’s behavior during such geopolitical instability can be unpredictable. It could either serve as a safe haven or be liquidated for liquidity. If market fear continues to rise, Bitcoin might break below the $102,000 support, thereby confirming the bearish implications of the descending triangle. However, if the market sees a return of bullish momentum, a break above the descending trendline could disprove the bearish pattern, paving the way for a retest of the $110,800 all-time high. Currently, Bitcoin is trading at $104,990.
