It’s been an exciting year for Bitcoin so far in 2019 but the last few weeks have been quite different from the first and second quarter of the year. Let’s take a look at some charts from Tradingview and some crypto-fiat exchanges to analyze Bitcoin Price.
What we’re looking at here is the daily chart on BTC/USD on Coinbase Pro (GDAX). Since the initial breakout above 10k in June, we find ourselves hitting lower highs and otherwise consolidating. The chart shows more or less a descending triangle that could also be viewed optimistically as a bull flag (pennant) which continues up once it breaks the upper descending trend line. Price is currently closer to that line but has a lot of room to range lower towards the bottom trend line of around 9300 to 9500. Volume has been decreasing throughout this formation. This triangle or pennant could last another month before making a decision on which direction to go. Therefore, no sudden movement is expected. But sentiment coming into the pennant was strongly bullish and so a continuation of the bull seems likely. (Keep in mind that in 2018 our descending triangle with support at 6k eventually broke down but sentiment was bearish.)
After a quick rise in April where we initially broke above the 100 day EMA and stayed well above it through strong months in May and June, now we are letting the moving average catch up and flatten out a bit. While price did dip below the 100 DEMA, we remain above it although not by much. Long term volatility has decreased significantly as we can see in the BTC/VND chart.
Throughout these 3 months, while $10k itself hasn’t been a particularly strong support level, each dip below $10k has been picked up fairly quickly and would have been profitable for anyone buying those dips. One would buy when the daily closed at or below $10k and then wait for two green days above $10k. If trading short term (relatively short term, closing trades within a week) in this manner, have reasonable targets (in this case around 10% +/- 5%) but be aware that this triangle could resolve by breaking out to the downside. Traders should have stop losses set at least by around 9000 if not higher, accepting a 3 to 5% loss, while expecting double or triple that amount or more in the winning case.
