The BTC markets are currently testing two major trendlines comprising a major symmetrical triangle. As of this writing, bitcoin appears to be following a major ascending trendline that dates back to mid-2017, whilst simultaneously testing a descending trendline that runs from December’s all-time high of nearly $20,000 USD to the local high of approximately $10,000. Many traders are expecting that the resolution of the triangle will determine the direction of the next significant move in the BTC markets.
Also Read: Data Prediction Sites Show More Conservative Cryptocurrency Price Forecasts
Consolidatory Range Tightens for BTC
In recent months, the BTC markets have consolidated in an increasing tightening range between approximately $6,000 and $10,000. After last month’s local high of nearly $10,000, the markets have formed a large lopsided symmetrical triangle pattern.
As of this writing, price action appears poised to break either above or below the symmetrical triangle formation, with the current price of roughly $7,700 brushing up against both the ascending trendline that dates back to July 2017’s prices of approximately $1,800, and the descending trendline running from the all-time high of nearly $20,000 to May’s local high of roughly $10,000.
Break Out or Break Down?
For traders, the BTC markets are producing frustratingly mixed signals, with the steadily declining trade volume witnessed in recent weeks likely indicating an increasing number of market participants opting to sit on the sidelines and wait for confirmation of bitcoin’s next major move.
When looking at the stochastic RSI, bitcoin is producing conflicting signals across different time-frames. Shorter time-frames, such as the 1-day, 12-hour, 6-hour, and 4-hour, suggest that the BTC markets may be over-bought, with the stochastic RSI sitting above the 80-threshold.
However, both the 1-week and the 3-day charts show the stochastic RSI to be underneath the 20-threshold – suggesting that an upward momentum shift could be imminent.
Short-Term Outlook
If the BTC markets are able to break above the symmetrical pattern in which the markets have been consolidating, the move may be interpreted as a confirmation that the recent retrace has produced a higher low, and will likely serve as a catalyst for a retest of the $9,000 to $10,000 area.
Should the markets snap below the long-term ascending trendline, many traders are predicting that the bitcoin will see a test of support at the $6,000 area for the third time this year.
Bitcoin Cash Consolidates Above $1,000
The BCH markets have continued to consolidate above $1,000 in recent days, following an impressive bullish rally that saw Bitcoin Cash gain more than 30% and break out of the bear-channel that drove price action for most of May.
As of this writing, Bitcoin Cash is trading for $1,140, with the markets appearing poised to test resistance at approximately $1,200 – a price area that converges with the descending trendline running from the November all-time high to the local high of roughly $1,800 posted last month.
When looking at the BCH/BTC charts, the Bitcoin Cash markets appear to have produced its second higher low for 2018. The recent bullish momentum saw BCH gain more than 20% as it bounced from roughly 0.124 BTC to test resistance at the 0.15 BTC area.
As of this writing, BCH is trading for approximately 0.148 BTC.
Do you think the markets will break down, or break out of the symmetrical triangle formation? Share your thoughts in the comments section below!
Images courtesy of Shutterstock, Trading View, Bitcoinwisdom
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