HomeBitcoin NewsBitcoin Awaiting Range Consolidation Breakout

Bitcoin Awaiting Range Consolidation Breakout

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Bitcoin in a Neutral Market:
Bitcoin is consolidating in the short-term. Last week, price fell to about 456, then rebounded to 492 before retreating again. The rally took away a prevailing bearish bias, and shifted bitcoin into a sideways market in the 1H chart. Note the clustering of the 200-, 100-, and 50-hour simple moving averages (SMAs), and how price has oscillating above and below them. The 1H RSI is also showing a market without any directional momentum.

As we begin the week, bitcoin is trading within a narrow roughly range between 474 and 480. As we get into the European session, price is trying to push below this range. If it does, we can be opening up last week’s lows around 456.

Bitcoin (BTCUSD) 1H Chart 9/15
bitcoin 1h chart 9/15

(click to enlarge)

Bearish scenario:
Now, if price does break below 474 and indicate a bearish outlook, we should see price hold below 477 on a subsequent pullback. 477 is the middle of the range. Also, if price returns above 477, it will clear all the 200-, 100-, and 50-hour SMAs, introducing a bullish bias, or at least showing lack of bearish trend development.  If the bearish outlook is confirmed, bitcoin has the 456 low from last week in site, and then the 442 August low below that. Ultimately a bearish outlook would be in-line with the prevailing trend in the medium-term, which has the 340 low on the year in sight.

Bullish scenario:
Now, if price breaks above 480, we should expect a bullish market to hold price above 477 on a subsequent pullback. If this scenario develops, bitcoin would have the 492 high, up to the 500 handle in site. A break above 500 could open up a bullish scenario at least toward 534. In the 4H chart, we can see that a break above 500 would put bitcoin above the 200-period SMA in the 4H chart, and the falling trendline coming down from the 534 high.

Bitcoin 4H Chart 9/15
bitcoin 4h chart 9/15

(click to enlarge)

Fan Yang
Fan Yanghttps://www.livebitcoinnews.com/
Fan Yang graduated from the University of Michigan with a Bachelors in Economics. He started his trading in 2006 after joining CMS Forex, a currency broker and became their Chief Currency Analyst. In 2010, he attained his Chartered Market Technician designation. Through the years, Fan has developed trading techniques that can be applied in stocks, currencies, and almost any asset class with liquidity. Although he specializes in technical analysis he uses fundamental factors to help guide his trade ideas before using the technical tools to plan out the trades.

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