- Bitcoin has been trading within the confines of a long-term consolidation pattern for the majority of the year.
- The market approaches the upper boundary of the triangle again as traders hope for a breakout above.
- Support levels moving forward; $6398, $6129, $6000, $5916.
- Resistance levels moving forward; $6622, $6848, $6915, $7000, $7165, $7481, $7872, $8000, $8371.
Bitcoin has started to show signs of relative stability as the market sees only a small shift by 0.5% over the past 7 trading days. The cryptocurrency is currently exchanging hands at a price of $6588 as the market experienced a 2.68% price decline over the past 90 days of trading.
Bitcoin continues to reign as the king with number 1 ranked position in terms of overall market cap across the entire industry. It currently has a total market cap value of $114 billion after the 65-month-old coin trades at a value that is 66% lower than its all-time high price.
Excitement is brewing in the industry as the market approaches the upper boundary of a long-term descending triangle. Let us continue to highlight price action over the long term and find out more.
Bitcoin price analysis
BTC/USD – Long-Term – Daily Chart
Analyzing the market from the long-term perspective above, we can see that Bitcoin has been falling for the entire trading year. However, we can also clearly see the formation of a technical consolidation pattern known as a descending wedge formation. The triangle is characterized by the falling upper boundary, that has been tested several times, and the lower boundary which sits around the $6000 handle.
Price action is approaching the apex of the triangle which is leading some traders to believe that a potential bullish breakout may be the initial spark needed to bring Bitcoin back above the $10,000 handle and higher.
Let us continue to analyze price action a little closer to highlight any potential support and resistance areas moving forward.
BTC/USD – Short-Term – Daily Chart
Analyzing the market from a shorter time frame, we can see that price action had experienced a bullish run when the market started from a low of $5790 on June 29th and extended to a high of $8506 on July 24th. This was a price increase totaling 47% from low to high.
As the market placed the high, it hit resistance at the upper boundary of the triangle pattern and rolled over. We can see that the market plummeted until it found relative support at the short term .886 Fibonacci Retracement level priced at $6129. After the market hit this area of support it rebounded and rallied until finding further resistance at the upper boundary of the triangle once again.
We can see that price action is now trading at the upper boundary of the triangle and is a price to break above. However, the market is lacking the required momentum and volume to make this a significant breakout above which may indicate that we may head back toward $6000 again before breaking out of the pattern.
If the bears do push price action lower we can expect immediate support at the .786 Fibonacci Retracement level priced at $6398 followed by the .886 Fibonacci Retracement priced at $6129. If the bears push the market even lower we can expect more significant support around the $6,000 handle.
Alternatively, if the bulls can push the market above the upper boundary of the triangle we can expect immediate resistance at the .618 Fibonacci Retracement level priced at $6848. Further resistance above this can then be expected at the $7,000 handle followed by the .5 and .382 Fibonacci Retracement level priced at $7165 and $7481, respectively.