Points of view
- The Bitcoin hourly chart shows that yesterday’s declining wedge break failed, but the outlook remains neutral with prices that remain well above the key support at $ 10,060.
- A break below $ 10,060 would strengthen the bearish configuration on the daily chart and could yield a drop to $ 9,755 (August 22 low).
- The outlook would turn bullish if BTC overrides the bearish configuration of the lowest highs with a UTC close above $ 10,956 (high of August 20).
Bitcoin (BTC) lacks a clear directional bias at the time of publication, as it failed to capitalize on a bullish breakout on Monday.
The main cryptocurrency has spent much of the last 20 hours negotiating the narrow range of $ 10,200 to $ 10,400.
Prices fell to a minimum of one week of $ 10,060 at 08:10 UTC yesterday, indicating a possible resumption of mass sales from Friday’s high of $ 10,950. However, the fall to a minimum of seven days was short-lived, and BTC rose well above $ 10,500 at 11:20 UTC, confirming a bullish break in the hourly chart.
The rupture of the fall wedge implied an end of the retreat from the recent highs and a resumption of the rebound from the August 29 low of $ 9,320.
However, the bullish configuration failed to attract offers and prices fell back to $ 10,250 at 4:40 p.m. UTC, as seen in the chart below.
The failed break has neutralized the bullish chart setting per hour.
Some observers consider failed outbreaks as a warning of an imminent mass sale. So far, however, the disadvantage has been restricted below $ 10,200.
The outlook will remain neutral as long as prices remain above $ 10,060, the minimum of the doji sail that applied the brakes on yesterday’s sale and fueled a price rebound to levels above $ 10,500.
If prices fall below $ 10,060, the bearish configuration seen in the daily chart below would gain credibility, possibly leading to a deeper fall to $ 9,750.
BTC fell from highs close to $ 10,950 to $ 10,280 on Friday, involving the price action seen in the last three trading days.
Essentially, the massive sale on Friday marked a downward breakdown of the consolidation, represented by the rotating candle on Wednesday and the doji candle on Thursday. The bear’s grip would be further strengthened if the $ 10,060 hourly graphic support is violated.
The outlook would turn bullish if prices manage to print a UTC close above the bearish low of $ 10,956 created on August 20.
At the time of writing, BTC is changing hands to $ 10,270 in Bitstamp, which represents a gain of 0.84 percent 24 hours.
While BTC is fluctuating, ethereum’s cryptocurrency ether (ETH), the second largest by market value, offers a better deal above $ 180 in Bitfinex.
Daily chart of ETH / USD
ETH jumped 5.35 percent on Saturday, confirming a breakdown of the descending wedge, a shift from a downtrend to a bullish trend. So far, the advantage has been limited to $ 185.00.
However, the cryptocurrency produced a candle with long wicks yesterday, marking indecision in the market. So now, $ 186 (Monday’s maximum) is the level to beat for the bulls.
A UTC close above that level would add credibility to the breakdown of the descending wedge and open the doors at $ 204 (maximum on August 19).
On the negative side, acceptance below $ 176 (Monday’s minimum) will likely invite sales pressure, producing a new proof of the recent low of $ 164.
Disclosure: the author has no cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; charts by Trading View