Wrapped BTC Price Analysis: Will bulls ride the market upward?

• Wrapped Bitcoin is making its way up to an essential level of $34096.
• The flag and pole pattern is firmly holding itself to ensure trend change.

Wrapped Bitcoin (WBTC) is an ERC-20 token linked to the price of Bitcoin (BTC) to bridge to the Ethereum blockchain and the conventional Bitcoin blockchain. Because WBTC matches the price of Bitcoin in the same way that USD stablecoins are tethered to the USD, it is sometimes referred to as a stablecoin. WBTC enables users to invest in Bitcoin while utilizing the advantages and capabilities of the Ethereum network by “wrapping” Bitcoin in the form of an ERC-20 token.

Wrapped was initially unveiled in January 2019 due to cooperation between various top cryptocurrency players. These included well-known blockchain businesses like Ren (formerly known as Republic Protocol), BitGo, Kyber Network, DeFi protocol, and significant digital asset companies. The endeavor aims to meet the demand for the inclusion of Bitcoin in the burgeoning Ethereum-based DeFi ecosystem.

Since its launch, WBTC has experienced rapid development and adoption, providing benefits to users of both Bitcoin and Ethereum. WBTC is anticipated to continue acting as a bridge linking these two significant blockchain networks despite DeFi’s growing popularity.

Technical Analysis of Wrapped

Weekly chart

Analyzing the price, we find that the coin has been making its way up by a bullish flag and pole pattern with a trend line supporting it. A break to the trend line can continue bearish momentum respecting the more considerable timeframe, but if the flag and pole pattern continues, we might see a change in character (uptrend from downtrend). The RSI (relative strength index) also gave an oversold sign with a divergence which led to a break in the pole. The upside momentum can continue above the recent high of $31379 till the support of $34600. The trend line supporting the uptrend, if broken, can give a bearish move if the 50 ema (exponential moving average) is split from above. 

Daily chart

After making constant lower highs, the coin broke out and made a new high, resulting in a change of character (uptrend from downtrend). The price is above 50 and 200 ema which is also a good sign for the bulls. The ADX (average directional index) also started rising with the breakout, which signals that the getaway is the one to sustain. If one observes, the market makes a new high and immediately comes down the following day, which is considered a fake-out (marked by a circle). A bearish move can be expected after the trend line is broken ($30306) till the retest level of $28415. However, one needs to be cautious about shorting a coin in an uptrend, and the currency could quickly move up above a recent high of $31338.

Conclusion

Wrapped Bitcoin is slowly creeping up to its previous support level (weekly chart) through the bullish flag and pole pattern. We can’t precisely pinpoint the coin’s direction in the coming weeks, but the bullish momentum seems promising. On the other hand, it would not be wise to forget the overall downtrend we are in. When investing/trading in WBTC, you must be confident that you are following the best course of action.

Disclaimer

The information in this document is provided for information purposes only. It does not constitute an offer, recommendation, or solicitation to any person to enter into any transaction or adopt any hedging, trading, or investment strategy, nor does it constitute any prediction of likely future movement in rates or prices or any representation that any such future campaigns will not exceed those shown in any illustration. Users of this document should seek advice regarding the appropriateness of investing in any securities, financial instruments, or investment strategies referred to in this document. They should understand that statements regarding prospects may not be realized. Opinions, Projections, and estimates are subject to change without notice.