Bitcoin Ends Bullish July: Here’s What to Watch as it Heads into August

Bitcoin Bitcoin / US Dollar Trading was mostly flat during Sunday’s 24-hour session continuing to consolidate after rising 15% over the Wednesday and Thursday sessions.

The consolidation is helping to keep the Bitcoin Relative Strength Index (RSI) from rising to the overbought region at the 70% mark.

Bitcoin has gained 19% since the beginning of July, causing the cryptocurrency RSI to correct from 29% on July 1 to the 60% level as of press time. The momentum back in bitcoin has caused the fear and green index to improve slightly from “extreme fear” in June, at 11, to “fear” in July, at 39.

The consolidation phase of the cryptocurrency is taking place in an inside bar pattern on the daily chart. The inside bar usually follows a continuous movement in the direction of the current trend.

The inside bar pattern has more validity on the larger time frames (four hour chart or larger). The pattern has a minimum of two candles and consists of a mother bar (the first candle in the pattern) followed by one or more subsequent candles. The subsequent candle(s) must be completely within the range of the main bar, each of which is called the “inside bar”.

Double or triple inner tape can be stronger than single inner tape. After the inside bar pattern is broken, traders want to monitor the high volume to confirm that the pattern has been recognized.

  • Bullish traders will want to look for inside bar patterns on stocks or cryptocurrencies in an uptrend. Some traders may take trades during the inside bar before the breakout, while hardcore traders take trades after the pattern is broken.
  • For bearish traders, finding an inside bar pattern on a stock or cryptocurrency in a downtrend will be key. Like bullish traders, bears have two options to take a position to play the pattern break. For bearish traders, the pattern is invalidated if the stock rises above the highest range of the mother candle.

Want a live analysis? Find me in the BZ Pro Lounge! Click here for a free trial.

Bitcoin chart: The inside bitcoin bar pattern is inclined to the upside because the cryptocurrency is trading in a fairly steady uptrend. However, Sunday’s candle appears near the bottom of Saturday’s parent bar, which could give bullish traders pause.

  • If Bitcoin drops below Saturday’s trading range on below average volume, the pattern will be invalidated. If the break-down comes with higher volume, then traders can watch for Bitcoin to print a higher bottom above $20.715, which could indicate that the bullish trend is in order.
  • If bitcoin breaks up from the inside bar pattern, Saturday’s low could be the next high in the uptrend.
  • There is a possibility that Bitcoin will print a bull flag pattern, with the bar forming between Wednesday and Thursday and the flag forming over the 24-hour trading sessions that followed. Conservative traders may decide to refrain from betting that the bull flag pattern will continue until Bitcoin breaks out of the pattern due to the upper wicks on Friday and Saturday.
  • If the bitcoin price drops below the eight-day exponential moving average, the bullish flag will likely be nullified.
  • Bitcoin has higher resistance at $25,772 and $29,321 and support below at $22,729 and $19,915.

See Also: If You Have $10,000 Right Now Can You Put It On Bitcoin, Ethereum, or Shiba Inu (SHIB)?

Leave a Reply

%d bloggers like this: