Bitcoin (BTC) seems set to continue consolidating for a few more days, after being rejected yet again very near the critical $5,350 resistance barrier. The long term trend remains bullish, and even the short term trend is looking slightly more bullish than bearish – even if the next day or two could see some downside within the current market structure.
The fact the Bitcoin was not rejected quite at $5,350, but slightly below it, suggests a shrinking consolidation into an apex at about $5,240 (on the BitMEX chart). Further corrections to the downside – or lack thereof – would yield more evidence in favor of this thesis. The trend of this consolidation can be seen below (via the blue arrows):
(source: TradingView.com)
The small rejection saw 2% shaved off the leading crypto, and the retrace was easily caught at the first support/resistance (S/R) zone. Another easily identifiable S/R zone waits to catch any further retrace, still within the market structure (both S/R zones in pink, above).
In the worst case, the safety net between $5.1k and $5,050 (again, on BitMEX chart) is waiting to catch any wicks to the downside. A fall below $5,050 or thereabouts would invalidate the local consolidating structure, and lead to a retest of $5,000.
Of course, a sideways triangle will eventually break out one way or another, begging the question “which way?”
(source: TradingView.com)
As we can see above, the overall trend remains bullish, and is increasingly doubling as an ascending triangle – a bullish pattern. No fewer than four retests (purple circles, above) of the top of the structure – albeit including the vicious rejection and false breakout of April 10 – suggest that the resistance at $5,350-ish may be weakening.
Bitcoin could very well break out of the smaller triangle into the arger, ascending one, and then up into the first band of resistance before April is out.
(source: TradingView.com)
Glancing at the daily chart, we can see that today’s daily candle will be important for determining the range of consolidation. If it closes below the previous day’s candle (April 18) at $5,227 (Coinbase chart), it could fall below into the bottom half of the structure.
Overall, we see that volume is consolidating, and yesterday’s volume was not strong enough to occasion a breakout to the upside.
(The views and opinions expressed here do not reflect that of CryptoGlobe.com and do not constitute financial advice. Always do your own research.)
