Bitcoin Poised to Test $50,000 on Bullish Pennant Formation

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Bitcoin experienced a massive spike earlier this week on news of Tesla’s $1.5 billion investment into the cryptocurrency but has since pared some gains.

The BTC/USD exchange rate entered a consolidation phase after hitting its new record peak above $42,000. As usual, some traders decided to secure their profits than wait on other bulls to extend the price rally. It is because the market looked too overheated to sustain another bull run—and the signs that Tesla’s bitcoin purchase won’t spur copycat investments from other corporates weighed on the prices overall.

That left the market in a short-term bias conflict while retaining its long-term bullish outlook. Bitcoin formed lower highs and higher lows, accompanied by declining volumes and momentum, constituting a Bullish Pennant. In retrospect, they are continuation candlestick patterns that occur in strong uptrends.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin eyes a bullish breakout as price forms a Pennant structure. Source: BTCUSD on

To that end, Bitcoin expects to fluctuate inside the Triangle-like structure, followed by a breakout move in the direction of its previous trend, which is bullish. Typically, the breakout target is situated at length equal to the Flagpole height (the upside move before the Pennant formation).

The Flagpole is about $5,500 long. That puts Bitcoin’s Bullish Pennant target above $50,000.

Bitcoin 4H Outlook

A larger timeframe shows Bitcoin trading near its overheated levels as it maintained support above the 20-4H exponential moving average near $44,000.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin is trading higher inside an Ascending Channel. Source: BTCUSD on

From a broader perspective, Bitcoin eyes an extended decline towards the lower trendline of the Ascending Channel (black), with previous resistance levels serving as interim support. That expects to crash BTC/USD to as low as $40,000 before it rebounds all over again to test new highs.

Bulls are active enough to spot dips and increase their accumulation in response. The current upside run has not witnessed any major price corrections yet, partially because of hopes of a declining US dollar, higher consumer price inflation, and ultralow interest rates. BTC/USD tends to perform better against such trends.

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