Our website needs some good Author. Who can write Cryptocurrency and Blockchain related article. If anyone is interested writing article in our website, please SignUp.
bitcoins

Bitcoin Price Eyes Triangle Breakout Above $6.4K

October 19, 2018 at 12:30 AM | By Jit Sutradhar Feature

Bitcoin (BTC) is again trading in a narrowing price range above $6,400, but the lateral trading may soon give way to a rally, according to technical studies.

The price consolidation comes after Monday’s big spike to three-week highs above $6,800, which weakened the bearish case put forward by last Thursday’s violation of key support.

So far, however, a bullish follow-through has not materialized, possibly because buyers are waiting for a more credible evidence of bearish invalidation.

Also standing in the way of a potential rally are a number of major key resistance levels, as discussed yesterday.

Should BTC clear these key obstacles, then traders may feel convinced that the cryptocurrency has bottomed out again at the 21-month EMA support and could push prices higher toward long-term falling trendline resistance above $7,000.

The above scenario could play out if the three-day long narrowing price range (triangle pattern) is breached on the higher side. Interestingly, the moving averages on the short duration charts are aligned for a potential break above the triangle resistance.

At press time, BTC is trading largely unchanged on the day at $6,440 on Coinbase.

Hourly chart

BTCUSD-hourly-chop

The 50-, 100- and 200-hour exponential moving averages (EMAs) are trending north, indicating a bullish setup. Further, the stacking order of the 50-hour EMA above the 100-hour EMA, above the 200-hour EMA is a classic bullish signal.

As a result, BTC is more likely to cut through the upper edge of the triangle, currently at $6,460.

Another sign of a possible building directional change comes from the choppiness index, which has dipped below the 38.2 percent level.

So, it seems safe to say that triangle breakout, if confirmed, could yield a sharp move higher, possibly toward $6,800.

Daily Chart

BTCUSD-daily-chart

Over on the daily chart, BTC has cleared the trendline falling from July highs and the 5-day and 10-day EMAs are beginning to rise in favor of the bulls.

Thus, prospects of a triangle breakout are high.

View

  • A triangle breakout looks likely and if confirmed, would signal a continuation of the rally from the Oct. 15 low of $6,151 and open the doors to $6,800.
  • A downside break of the triangle would shift risk in favor of a re-test of the 21-month EMA of $6,123.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; charts by Trading View

 

Article Source: http://www.coindesk.com

Comments (0)

    Write a Reply or Comment

    You must be Logged In or Sign Up to post a comment.