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Monday, May 27, 2024

Bitcoin Consolidates Under Heavy Resistance, Prints Bullish Pattern: A Look At The Technicals

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Bitcoin BTC/USD was trading slightly lower Tuesday in consolidation, while the stock market was closed for Independence Day.

The sideways move came after the apex crypto spiked about 2% higher on Monday, when Bitcoin rejected near the $31,500 mark.

The crypto was trading horizontally on far below average volume, which settled Bitcoin into an inside bar pattern on the daily chart. An inside bar pattern indicates a period of consolidation and is usually followed by a continuation move in the direction of the current trend.

See Also: Ethereum Tops This Key Level

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An inside bar pattern has more validity on larger time frames (a four-hour chart or larger). The pattern has a minimum of two candlesticks and consists of a mother bar (the first candlestick in the pattern) followed by one or more subsequent candles.

The subsequent candle(s) must be completely inside the range of the mother bar and each is called an “inside bar.”

A double, or triple inside bar can be more powerful than a single inside bar. After the break of an inside bar pattern, traders want to watch for high volume for confirmation the pattern was recognized.

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The Bitcoin Chart: Bitcoin’s inside bar leans bullish because the crypto was trading higher prior to forming the pattern. Bullish traders want to see the crypto break up from Monday’s high-of-day on higher-than-average volume, which will confirm the pattern and also break Bitcoin up from heavy resistance at $31,418.

  • Bearish traders want to see Bitcoin continue to reject that level, which could cause the bearish double top pattern, printed on June 23 and Monday, to play out.
  • If that happens, bearish traders want to see Bitcoin break under $30,000 on high volume, which would cause the crypto to break down under the eight-day and 21-day exponential moving averages (EMAs).
  • Bitcoin’s 50-day simple moving average (SMA) is trending above the 200-day SMA, which indicates a bull cycle and gives long-term bullish traders confidence.
  • For shorter-term traders, a breakdown from the eight-day EMA could signal a place for a potential exit.
  • Bitcoin has resistance above at $31,418 and $35,593 and support below at $30,050 and $28,690.

Read Next: Bitcoin’s Worst Nightmare? Crypto Skeptic Pan Gongsheng To Lead China’s Central Bank

Image via Pixabay

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