Bitcoin (BTC) has been entering a breakout/breakdown scenario within the last couple of days, as the limits of a consolidating bull flag-looking pattern are testing by price. Yesterday, Bitcoin broke out of the downtrend resistance of this structure, after consistent bull defense of $9,000, and is so far holding on the retest of this resistance.
Starting on the 1-hour for a detailed picture, we see that Bitcoin has been ranging sideways at the bottom of summer’s huge consolidation support. After repeated attempts to push the price down, and very obvious and diligent defense of this bottom, Bitcoin broke out clean above the downtrend (black dotted) and the 55 EMA (purple) on significant volume.
Bears tried to push this breakout back down, and the bulls were forced to again defend $9k. But we see that, at time of writing, the result of the entire operation is a stable breach of the downtrend -- meaning Bitcoin has technically broken out of the consolidation.
The EMAs on the 3-hour chart capture the current price action well. Price is ranging between the 21 and 55 EMAs, with rejections off of both those averages. We can take a close outside of this range, on either side, as an early-warning bell up or down.
We have some buy volume building on this chart. RSI has put in a slightly higher low, and the histogram is slowly making its way to the positive side. Things seem slightly more bullish than bearish, here.
Moving on to the massive monthly timeframe which just closed yesterday, there are a couple things to note. First, the last two candle closes make a tweezer bottom, which we could see as bullish. We see an important level of about $8,300 on this chart, making a support range with previous candles between $8,300-550. This may be useful information in the future, if price starts to head south.
We see that price has also held the 8 EMA, rather well on this close. The monthly volume was slightly up on Coinbase, which may signal an end to the giant retracement-cum-consolidation from mid-summer.
The intuitive result here is a reversal after a long season of downtrend. In the very short term, we are just waiting to see if the careful breakout holds.
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