Bitcoin Price Seeks Direction as Trading Range Narrows
Bitcoin's price range continues to narrow with each passing day, but a big move on either side could happen soon, the technical charts suggest.
Having witnessed a bull reversal on Wednesday, prices on CoinDesk's bitcoin price index (BPI) rose to $11,711 at 03:59 yesterday. It appeared as though bitcoin (BTC) would break above $12,000 and confirm completion of the bottoming process.
However, prices fell back to $10,889 at 17:59 UTC. Bitcoin bulls made another attempt to regain lost glory, but faced rejection at $11,608 in Asian hours today.
The failure to capitalize on Wednesday's bull reversal has yielded a drop to a three-day low of $10,321 today. As of writing, BTC is changing hands at around $10,600. The cryptocurrency has depreciated by 4.11 percent in the last 24 hours, says data source OnChainFX.
Further, the drop from the previous day's high of $11,711 to below $10,500 has neutralized the immediate outlook. A break either up or down would likely set the tone for the next major move
hour chart
The above chart (prices as per Coinbase) shows bitcoin has created a symmetrical triangle. It comprises of two converging trendlines, representing a series of sequentially lower peaks and higher troughs. It is a trend continuation pattern, i.e. it usually ends with a big move in the direction of the original trend.
In BTC's case, the symmetrical triangle is formed in a downtrend (sell-off from a record high of $20,000). So, the narrowing price range (symmetrical triangle) could end with a big move to the downside.
Such a move would open doors for a slide to $5,232 (target as per the measured height method - the difference between triangle high and low subtracted from the breakdown price/triangle support of $10,480). However, the downside target sounds far-fetched.
Nevertheless, BTC could revisit $9,000 following confirmation (4-hour close below triangle support) of a downside break of the symmetrical triangle pattern. The relative strength index (RSI) is sloping downwards, suggesting scope for a drop in prices. The key MAs - 50, 100, 200 - are sloping downwards in favor of the bears. So, the downside break looks likely as per the 4-hour chart.
That said, the dips below the $10,000 mark are to be viewed with caution says the daily chart.
So far, the bears have consistently failed to keep BTC prices under $10,000. Also, BTC has been able to avoid a daily close (as per UTC) below $10,391 (50 percent Fibonacci retracement of 2017 low to high). Further, the rising trendline (drawn from July low and September low) support is lined up at $9,370.
So, there is always a risk of BTC running into bids anywhere between $9,000 to $10,000.
View
A bearish symmetrical triangle breakdown could yield a sell-off to $9,000, but dips below $10,000 could be transient.
Only a daily close (as per UTC) below the ascending trendline support of $9,370 would open doors for a sustained move lower to $8,148 (61.8 percent Fibonacci retracement of 2017 low to high).
Bullish Scenario: An upside break of the symmetrical triangle would add credence to persistent demand around $10,000 and could see BTC test resistance at $13,000 and $14,622 (50-day moving average) over the weekend.
Disclosure:
DISCLAIMER :
This content is for informational, educational and research purposes only.
Please get the advice of a competent financial advisor before investing your money in any financial instrument.
It is strongly recommended that you consult with a licensed financial professional before using any information provided here . Any market data or news commentary used here is for illustrative and informational purposes only.
Trading involves a high level of risk. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future performance. Consult an investment professional before investing.
All ideas , trade signals , opinions and/or forecasts are for informational, educational and research purposes only and should not be construed as a recommendation to invest, trade, and/or speculate . Any investments made in light of these ideas, trade signals , opinions, and/or forecasts, expressed or implied herein, are committed at your own risk. I am not an investment advisor, information shared here is for informational, educational and research purposes only and not a recommendation to buy or sell anything .
🐒
Please voice your opinions in the comments below.
Hi! I am a robot. I just upvoted you! I found similar content that readers might be interested in:
https://sg.finance.yahoo.com/news/bitcoin-price-seeks-direction-trading-134037395.html