Bitcoin Consolidates Above $10.2K After Failed Price Breakout

Bitcoin Consolidates Above $10.2K After Failed Price Breakout

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  • Bitcoin’s hourly chart shows that yesterday’s falling-wedge breakout failed, but the outlook remains neutral with prices holding well  above key support at $10,060.
  • A break below $10,060 would strengthen the bearish setup on the daily chart and could yield a drop to $9,755 (Aug. 22 low).
  • The outlook would turn bullish if BTC invalidates the bearish lower-highs setup with a UTC close above $10,956 (Aug. 20 high).

Bitcoin (BTC) is lacking clear directional bias at press time, having failed to capitalize on a bullish breakout on Monday.

The top cryptocurrency has spent much of the last 20 hours trading the narrow range of $10,200–$10,400.

Prices dropped to a one-week low of $10,060 at 08:10 UTC yesterday, a potential resumption of the sell-off from Friday’s high of $10,950. The drop to the seven-day low was short-lived, though, and BTC rose well above $10,500 by 11:20 UTC, confirming a bullish breakout on the hourly chart.

The falling wedge breakout implied an end of the pullback from recent highs and a resumption of the rally from the Aug. 29 low of $9,320.

The bullish setup, however, failed to draw bids and prices fell back to $10,250 at 16:40 UTC, as seen in the chart below.

Hourly chart

The failed breakout has neutralized the bullish hourly chart setup.

Some observers consider failed breakouts as a warning of impending sell-off. So far, however, the downside has been restricted below $10,200.

The outlook will remain neutral as long as prices are holding above $10,060 – the low of the doji candle that applied the brakes on the sell-off yesterday and fueled a price bounce to levels above $10,500.

If prices break below $10,060, the bearish setup seen on the daily chart below would gain credence, possibly leading to a deeper drop to $9,750.

Daily chart

BTC fell from highs near $10,950 to $10,280 on Friday, engulfing the price action seen in the previous three trading days.

Essentially, Friday’s sell-off marked a downside break of the consolidation, represented by Wednesday’s spinning top candle and Thursday’s doji candle. The bear grip would further strengthen if the hourly chart support of $10,060 is breached.

The outlook would turn bullish if and when prices manage to print a UTC close above the bearish lower high of $10,956 created on Aug. 20.

As of writing, BTC is changing hands at $10,270 on Bitstamp, representing a 0.84 percent gain on a 24-hour basis.

While BTC is wavering, ethereum’s ether (ETH) cryptocurrency, the by market value, is better bid above $180 on Bitfinex.

ETH/USD daily chart

ETH jumped by 5.35 percent on Saturday, confirming a falling-wedge breakout – a bearish-to-bullish trend change. So far,  the upside has been capped around $185.00.

However, the cryptocurrency produced a candle with long wicks yesterday, marking indecision in the market place. So now, $186 (Monday’s high) is the level to beat for the bulls.

A UTC close above that level would add credence to the falling-wedge breakout and open the doors to $204 (Aug. 19 high).

On the downside, acceptance below $176 (Monday’s low) will likely invite selling pressure, yielding a retest of the recent low of $164.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

image via Shutterstock; charts by 

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This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.