Bitcoin Breakout Watch: Upside or Downside Move Looms
The Bitcoin price has been stuck in a sideways pattern for nearly two weeks. Analysts are watching closely as this flag pattern is about to break, but it's unclear whether it will be an upside or downside move.
In the 4-hour chart, the original triangle pattern has become elongated, allowing the price action to travel further sideways. Typically, a breakout occurs when the price enters the last third of a pattern like this, which is where Bitcoin currently stands. Tuesday may be the day this happens.
The bulls are hopeful that the breakout will be to the upside, as it's a continuation pattern. However, the candle bodies suggest that the bears have been stronger, with green upside moves containing many small candles and downside moves being sharper with fewer candles. The Stochastic RSI indicator lines are also coming down, which could signal a forceful breakout to the downside.
In the daily time frame, a pennant has formed at the top of the flag pole. A classic bull flag is present, but the $78,500 horizontal resistance level is keeping the price below. The bulls must break through this and out the top of the pennant soon, as they have little time left to do so.