Bitcoin price has been hovering around 5,450 for the past five trading days. This price also served as a level of interest for BTCUSD on April 2019. Will we see the cyrptocurrency bounce or fall from this level?
Bearish Pennant Suggests BTCUSD Could Soon Drop, Again
The daily chart paints a bearish setup. By looking closely at the highs and lows of bitcoin price, it can be seen that the cryptocurrency has formed lower highs and higher lows. Because this happened after a strong drop, the consolidation completes a bullish pennant chart pattern. In forex trading, this is widely regarded as a bearish continuation indicator. A close below yesterday’s low at 4,432.30 may constitute a downside break of the pennant. It could then mean that bitcoin price would soon fall to last week’s lows at 3,858.00.
Upside Break of Rectangle Would Indicate Strength of Buyers
Meanwhile, the hourly time frame reveals more clues if the buyers are gaining ground. Bitcoin price has formed what seems to be a rectangle. A close above resistance at 5,9778.10 could mean that there may be enough buyers in the market. It would also effectively break resistance at the 100 SMA. This means that bitcoin price could trade as high up as 7,661.40 where it previously made lows.