Bitcoin's Price Needs Move Above $8,350 to Regain Bull Bias

Bitcoin's (BTC) price is consolidating in a narrow range at press time and could regain bullish momentum above $8,350, technical charts indicate.

The leading cryptocurrency moved back above $8,000 on Friday as expected and was seen rising to recent highs above $8,500 over the weekend.

However, BTC has traded in a sideways manner in the last 60 hours. The upside has been capped around $8,300 and dips to $8,050 have been short-lived, according to Bitfinex data.

Despite the bull breakout, the price consolidation has neutralized the immediate bullish outlook, yet it is still too early to call a bearish reversal. Further, buyers may feel emboldened if the $250 trading range is breached to the upside, resulting in a resumption of the rally.

As of writing, BTC is changing hands at $8,170 on Bitfinex.

4-hour chart

BTC witnessed a descending broadening channel breakout on Friday – a continuation pattern – which signaled a revival of the rally and opened the doors to a re-test of $8,507 (July 24 high).

However, the bullish move failed to materialize and the cryptocurrency ended up creating a sideways channel over the weekend, as seen in the above chart.

An upside break of the sideways channel now would validate the descending broadening channel breakout and allow a rally to 200-day moving average (MA) of $8,468. On the other hand, a move back into the descending broadening channel could prove costly.

That said, the probability of a bullish breakout of the sideways channel is high as the major moving averages are biased toward the bulls. For instance, the 50-candle, 100-candle, and 200-candle MA are trending north and located one below the other.

Daily chart

The relative strength index (RSI) is no longer reporting overbought conditions, meaning there is room for a rally to recent highs above $8,500 on the upside break of the sideways channel seen in the 4-hour chart. Further, the 10-day MA continues to rise in a bullish manner.

View

• Bitcoin's price consolidation, when viewed against the backdrop of the descending channel breakout, indicates bullish exhaustion. Consequently, the immediate bullish outlook has been neutralized.
• A break above $8,340 (upper end of the sideways channel) would allow a re-test of $8,468 (200-day MA) and $8,507 (July 24 high). A daily close (as per UTC) above the 200-day MA would confirm a long-run bear-to-bull trend change.
• On the downside, a fall back into the descending broadening channel would shift risk in favor of a deeper price pullback to the 100-candle MA in the 4-hour chart, currently located at $7,496.

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

Bitcoin image via Shutterstock; Charts by Trading View