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Bitcoin (BTC/USD) - Ascending Triangle Suggests Upside Above Current Resistance Around $5400

Bitcoin’s $BTCUSD price has been bullish in the past couple of months after stabilizing above $3000 at the end of 2018. There was a period of consolidation under $4200, but price broke that resistance at the end of March, and BTC/USD surged to $5350-$5400 area before settling again.

In the 4H chart below, we can see price essentially holding under $5400 with a relatively flat resistance. Meanwhile, the lows have been getting higher and higher. This describes an ascending triangle, the same pattern we saw when price was consolidating above $3000 and below $4200.

BTC/USD 4H Chart

(click to enlarge)

  • The 4H also shows us that the RSI has been holding above 40 after it pushed above 70, 80, and even 90 back in late March.
  • The RSI here reflects maintenance of the bullish momentum.
  • However, volume has been drying up, which means the market will likely need another catalyst to rally, instead of riding the prevailing bullish momentum.
  • If we do get a catalyst and price clears $5400 again, the $6000 area will be next. This was a key consolidation support throughout 2018 and will likely become a key resistance. (This was the support of a descending triangle
  • When we look at price action since early 2018, we can say that BTC/USD has been trading in triangles.
  • The 2018 triangle lasted almost the whole year in 2018, until November.
  • Then the ascending triangle that followed took 4 weeks to develop before breaking.
  • The current triangle is pushing a month.
 

Interpretation, Expectation:

  • What can we make of the consolidation patterns getting smaller in both price and time?

  • In the long-term, these patterns will just be noise.
  • But in the short-term, it looks like a market that is getting antsy. Maybe this is a bullish sign, but for the very short-term (looking ahead a month or two).
  • Without speculating too far, I would say that the only thing I can anticipate is a push to $6000 IF price clears $5400.
  • On the other hand, a break below $5000 would open up the $4200-$4400 area.

BTC/USD Daily Chart

(click to enlarge)

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