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Three weeks ago, we proclaimed “Bitcoin is breaking out.” And so far, the King of Crypto hasn’t done a darn thing.
Bitcoin has been stuck in a tight trading range – between $63,000 and $66,000 – for the past few weeks. The lack of action has lulled traditional bitcoin cheerleaders into hibernation. And, momentum traders have moved on to exciting assets.
Yet, bitcoin still looks like it’s on the verge of a breakout. Here’s the updated chart…
The chart has morphed into an ascending triangle pattern – which is when the assets makes a series of higher lows, and keeps banging into resistance at the same level. This is a bullish pattern that usually resolves with a breakout above resistance and an immediate move higher.
There’s a lot of energy building up in this chart.
All of the various moving averages are in a bullish configuration – with the 9-day EMA above the 20-day EMA, and the 20-day EMA above the 50-day MA. And, the chart itself has formed an ascending triangle pattern – which is a bullish setup that often leads to an upside breakout.
The momentum indicators at the bottom of the chart are all in neutral territory. So, there’s plenty of room for them to move higher during a rally phase before hitting overbought conditions.
If bitcoin can rally above the July high of $66,500, then it’s likely headed towards our $75,000 target.
Most important, though, and what doesn’t show up in the chart, is the lack of any interest in bitcoin at the moment. Nobody is trading it. The volume in all the various bitcoin ETFs is at the lowest level in a year.
The traditional bitcoin cheerleaders aren’t showing up on any of the financial television stations. And these days the phrase, “To the moon!” is more likely to be shouted by gas station owners than the bitcoin faithful.
This is the sort of environment where bitcoin often starts to sneak higher.
The rally hasn’t happened yet. But, I’m sticking with what I wrote three weeks ago…
It sure looks to me like the King of Crypto is headed higher for the next few weeks.
Best regards and good trading,
Jeff Clark
Editor, Market Minute