Bitcoin Consolidation Likely to Continue

Bitcoin has been consolidating sideways for a couple days since hitting swing high resistance at $780.  IMHO it will likely continue to consolidate thus for another day or two.  However, having looked at the chart for the past day or two, I am reasonably confident that the upward trend will resume.

Take a look at an 8-day chart: 1207d As you can see, the 2nd arc stopped the rally in early July.  However, that arc has since yielded to buying pressure.  The 2nd arc of the pair remains to be broken.  It should go without saying that it could conceivably be strong enough to know price back down.  Note that it looks like price will likely meet that arc right around the $780-$800 point.  So, we can’t rule out a double top forming.

However, the daily chart suggests that the long term trend has little stopping it from going higher than that, so I remain cautiously optimistic.1206bThe short-term daily chart above shows resistance in the $845 area.

Let’s look at a couple pitchforks on an 8-hour chart:1207eAs you can see, the 0 line (bold blue),  the 1 line, 0.5 and 1.414 extensions have all presented trade-able resistance and support areas.  IMO the 1 line (dark brown line) will not likely be broken in this cycle.

Lets look at another pitchfork with a noticeably more aggressive pitch:1207f

Here you can see that for the longest time pricetime was bound by the 1.5 extension (not shown), the 1.618 and 1.732 extensions. Will the 2.0 extension be broken? Time will tell, but imho if pricetime hits that line, a buying opportunity will likely present itself.

Happy trading!

Remember:  The author is a trader who is subject to all manner of error in judegment.  Do your own research, and be prepared to take full responsibility for your own trades.

Image from Shutterstock.

This article is protected by copyright laws and is owned by CCN Markets.

About the author

Avatar
Jim Fredrickson

Jim has an MBA from the University of Southern California. He has been trading commodities, forex and bitcoin since 1993. You may email him directly at: jimfred1276 at gmail dot com. Feel free to follow him on twitter.

Do NOT follow this link or you will be banned from the site!