Bitcoin has been hovering around the $10K level for a while now as the cryptocurrency continues to trade within the confines of a large descending triangle pattern. During times of consolidation, the market will often move sideways within a tight range, causing a coiling effect as the market constricts within the confines of the triangle. This is largely one of the main reasons as to why Bitcoin has remained around the $10K handle for a few weeks now.
Bitcoin has been pretty stable over the past 30 days after losing a small 4.5% to bring the price down to $10,320. The cryptocurrency had recently rebounded at the $10,000 support level over the past couple of days which has seen the price for the coin increase by 3.7%. The cryptocurrency currently holds a $185 billion market cap value and is still up by a total of 22% over the past 90 days.
Bitcoin Price Analysis
What Has Been Going On?
Looking at the daily BTC/USD chart above, we can clearly see the long term consolidation pattern that Bitcoin has been trading within recently. The descending triangle has started in June and has been supported with a strong base at the $9,400 level as price action continues to be dictated by these boundaries. The support at $9,400 has been tested 3 times already and has held each time.
Bitcoin has recently rebounded at support provided by the $10,000 level and has started to head higher but the outlook is pretty neutral at this moment in time. For this market to turn bullish again we would need to see the market break above the upper boundary of the descending triangle and continue to create highs above $11,000.
If Bitcoin was to fall beneath the $9,400 level - the market would turn bearish.
Are We Pumping or Dumping?
So the question is - are we pumping or dumping? Well, unfortunately, as we are trading within a period of consolidation - the answer to the question is simply - we do not know. The market could certainly head in either direction depending on which side of the triangle we break above.
If the market was to start to dump again, we could expect initial support to be located at $10,000. If we break beneath $10k, the next level of support is then located at $9,768 (increased by 200-days EMA), $9,600, and then at the lower boundary of the triangle at the $9,400 level. If the sellers continue to push the market beneath the triangle, we can expect support to be located at $9,136, $9,000, $8,942, and $8,773.
Alternatively, if this recent bullish press can continue higher, we can expect immediate resistance to be located at the upper boundary of the triangle (currently around the $10,500 - $10,600 level). IF the bulls can break above the triangle, the pump could certainly be one. We would first need to break above resistance at $10,923, $11,000, $11,081 and $11,308. If the bulls can continue to push the market further higher, resistance can be found at $11,500, $11,600, $11,821, $12,000 and $12,513.
The RSI is currently directly trading along with the 50 level which shows indecision within the market. If we would like to see the market pumping, we would need to see the RSI rise and break further above the 50 level.
Bitcoin is currently sitting around the $10,000 level because we are in a period of consolidation. We need to be patient and wait for the market to dictate the next move which will result in either a pump or dump.
If the bulls can penetrate above the triangle, we may certainly see Bitcoin head higher toward $13,000. However, if Bitcoin breaks beneath $9,400 - we may see an overall long term correction to $6,100. One thing we do know is that the market is quickly approaching the apex and a breakout is expected at some point before the apex is reached.