(BTC) is stuck in a narrow $550 between the key long-term moving averages today, but may be prepping for a breakout, the technical charts suggest.

With the bull/bear bias now unclear, the big problem now is trying to work out in which direction the price will go.

As of writing, BTC is changing hands at $8,760 on Bitfinex, and is trading between the 50-day moving average (MA) at $8,287 and the 100-day moving average at $8,837.

The sell-off from the May 5 high of $9,990 came to halt around the 50-day MA on Saturday. Further, the 50-day MA also acted as strong support on Monday. Meanwhile, on both occasions, the rebound from the 50-day MA ran out of steam around the 100-day MA hurdle.

The rangebound action seen in the last three days has established the 50-day MA as a major support and the 100-day MA as a formidable resistance and the breakout of this zone will likely set the tone for the next big move in BTC.

Daily chart

On Monday, BTC created a doji  1; a candlestick pattern, which indicates indecision in the marketplace. However, when viewed against the backdrop of the sell-off from the May 5 high of $9,990, the doji signals indecision among the bears (or bearish exhaustion). So, the immediate bearish outlook has been neutralized.

A close today (as per UTC) above the 100-day MA of $8,837 would signal bullish doji reversal and upside break of the trading range. Meanwhile, a close below the 50-day MA of $8,287 would confirm downside break of the trading range and bearish doji continuation pattern, i.e. sell-off from the recent high of $9,990 has resumed.

That said, the odds of the bullish breakout (or bull doji reversal) still appear low, as the bulls an uphill task as seen in the chart below.

4-hour chart

On the above chart, the falling trendline resistance is seen around $8,810 and is immediately followed by hurdle at $8,910 (expanding channel resistance).

With major moving averages (50, 100 and 200) trending south (bearish), BTC bulls will likely struggle to cut through resistance at $8,900 in a convincing manner.

Note, the bears are about to score another brownie point by pushing the 50-candle MA below the 200-candle MA (bearish crossover).

The 5-day MA and the 10-day MA (seen in the daily chart) are also biased bearish.

View

Another rejection at the descending trendline seen in the 4-hour chart will likely yield a drop to 50-day MA located at $8,287.

That said, only a daily close (as per UTC) below the 50-day MA would signal a revival of the sell-off from the recent high of $9,990 and would allow a deeper drop to $7,787 (61.8 percent Fibonacci retracement of the rally from the April 1 low to the May 5 high) or even as low as $7,698 (61.8 percent Fibonacci retracement of the rally from the July 2015 low to the December 2017 high).

On the other hand, a convincing move above $8,910 (expanding channel hurdle) would expose resistance lined up at $9,390.

Chalk arrows image via Shutterstock

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