Bitcoin in Tug of War Between Bulls and Bears as Trading Range Tightens

 

Omkar Godbole

Aug 9, 2019 at 11:18 UTC

Updated Aug 9, 2019 at 11:29 UTC

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• Bitcoin has charted a narrowing price range over the last three days, neutralizing the immediate bullish setup.
• A bull revival needs a UTC close above Wednesday’s high of $12,145, according to a double inside bar pattern seen on the daily chart.
• The outlook would turn bearish if prices print a UTC close below Wednesday’s low of $11,388.
• The odds of a bearish UTC close would rise if BTC breaks lower from the contracting triangle seen on the intraday charts.

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Bitcoin (BTC) is witnessing indecisive price action for the third day, with a break above Wednesday’s high of $12,145 needed to revive the bullish outlook.
The leading cryptocurrency is currently trading at $11,690 on Bitstamp, representing a 0.85 percent drop on the day.
Prices hit a high of $12,040 in the Asian trading hours before quickly falling back below the $12,000 mark. Today is the fourth straight day of bull failure above $12,000.
The cryptocurrency hit an intraday high of $12,325, $12,145 and $12,061 on Tuesday, Wednesday and Thursday, respectively only to print a UTC close below $12,000 on all three days.
Essentially, BTC has charted lower highs above $12,000 since Tuesday. At the same time, it has created higher lows in the last three days. That narrowing price range is a sign of indecision in the market place.
The consolidation could also be considered a sign of bullish exhaustion since it comes following a 35 percent price rise over eight days, as seen in the chart below.

6-hour chart

Bitcoin picked up a bid near $9,100 and rose to a one-month high of $12,325 on Tuesday. Since then, the cryptocurrency has been restricted to a contracting price range, as represented by trendlines connecting lower highs and higher lows.
A break above $12,000 would confirm range breakout and pave way for a move toward $13,000.
BTC, however, could fall back to the former resistance-turned-support of $11,120 if the range is breached to the downside.
The relative strength index is reporting an inverse head-and-shoulders breakdown, a bearish reversal pattern. As a result, a range breakdown looks likely.

Daily chart

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