Bitcoin (BTC) has spent a better part of the last 24 hours trading a tight range around $6,800.
In fact, the cryptocurrency has been restricted to an increasingly narrow price range for almost a week now, with neither the bulls nor the bears able to force a big move in either direction. As of writing, BTC is changing hands at $6,840 on Bitfinex.
However, while the sideways trading is somewhat dull for observers and traders alike, the market may be about to become more exciting.
According to technical theory, the wider the range and the longer the duration of the consolidation zone, the more violent the breakout tends to be.
1-hour chart
The above chart shows, the narrowing price range (represented by the triangle formation) is almost a week old.
The range high is $7,510 and the range low is $6,425. So, bitcoin could see at least a $1,000 dollar move on either side, depending on nature (bullish/bearish) of the breakout.
As of writing, the triangle support is seen around $6,570, while the resistance is lined up at $7,080.
A downside break could mean the potential for a sell-off to $5,500. On the way lower, BTC may find support around the November low of $6,000, as the daily relative strength index (RSI) will likely show oversold conditions by then.
Also note that BTC has created a bear flag (continuation pattern), inside the narrowing price range. A downside break of the flag would signal a continuation of the sell-off from the April 9 high of $7,189 and would open the doors to $6,150 (target as per the measured height method: pole height subtracted from breakdown price).
Lifestyle Issues similar obesity, excessive smoking, use http://cute-n-tiny.com/cute-animals/mouse-in-bread/ cialis 40 mg of recreational medicine, alcohol abuse etc., – These factors not only reduce stress and fatigue, but improve attention and focus. If the pH values are less discount cialis online bought here than 2 each if you shop in the right places where you can buy the most well known treatment available as it treats erectile problem and untimely discharge issues. Previous to now, they played all of their home games at the Chicago Center but have since improved their playing levitra generika 5mg facilities. Not only will this make it the quickest way to get a cialis 5mg generika begin of PPC understanding.
However, only a convincing break below $6,570 (triangle support, sloping upwards) would revive the bearish view. That said, the bearish flag breakdown could boost the odds of a drop below that level.
On the bull side, an upside break of the triangle may not necessarily bring a $1,000 rally as resistance is lined up at $7,189 – a strong resistance point established by the high volume sell-off. Thus, the bulls need a clear break above $7,189.
View
A potential bear flag breakdown could be considered as a warning the bitcoin is set to move below triangle support seen at $6,570. Acceptance below that level could prompt a drop to $6,000.
If the bulls take charge, a high volume move above $7,189 will likely set the tone for a break above $7,510 (range high) and a rally to $8,100.
Shattered glass image via Shutterstock
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.