Here’s why Bitcoin could shoot higher if this trend is confirmed

Here’s why Bitcoin could shoot higher if this trend is confirmed

Bitcoin BTC/USD was traded about 3% higher during Saturday’s trading session on continued momentum after bullishly breaking out of a falling channel pattern on July 27, as indicated by Benzinga on July 25.

During Friday’s session, Bitcoin negated the downtrend in which it was trading inside the falling channel but has yet to confirm a new uptrend on the daily timeframe.

An uptrend occurs when a stock consistently makes a series of higher highs and higher lows on the chart.

The higher highs indicate that the bulls are in control while the intermittent higher lows suggest periods of consolidation.

Traders can use moving averages to identify an uptrend, with rising lower timeframe moving averages (like the eight-day or 21-day exponential moving averages) indicating that the stock is in a steep short-term uptrend.

Rising longer-term moving averages (like the 200-day simple moving average) indicate a long-term uptrend.

A stock will often signal when the higher high is in place by printing a reversal candle such as a doji, bearish engulfing, or hanging man candle. Likewise, the higher low could be signaled when a doji, morning star, or hammer candlestick is printed. Additionally, the higher highs and higher lows often take place at resistance and support levels.

In an uptrend, the “trend is your friend” until it isn’t, and in an uptrend there are ways for both bullish and bearish traders to participate in the stock:

  • Bullish traders who already have a position in a stock can be confident that unless the stock makes a lower low, the uptrend will continue. Traders looking to take a position in a stock trade in an uptrend can usually find the safest entry at the higher low.
  • Bearish traders can enter the trade on the higher high and exit on the pullback. These traders can also enter when the uptrend breaks and the stock makes a lower low, indicating that a reversal into a downtrend is on the horizon.

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The Bitcoin chart: Bitcoin started Saturday’s 24-hour session by printing an inside bar pattern, and late in the morning the crypto attempted to break out of Friday’s trading range. If Bitcoin closes the trading session near its daily high and above Friday’s daily high, the crypto will print a bullish Marubozu candle, which could indicate that higher prices are on the cards for Sunday’s session.

  • Ultimately, Bitcoin needs to be retraced to at least print a higher low, which would confirm a new uptrend. When that happens, traders can watch for the crypto to form a bullish reversal candlestick, such as the . B. a doji or hammer candlestick above $20,715 which is the recent low.
  • A pullback is likely to come in the next few days as Bitcoin’s Relative Strength Index (RSI) is around 64%. When a stock or crypto’s RSI approaches or hits the 70% mark, it is becoming overbought, which can be a sell signal for technical traders.
  • Traders can wait for a reversal to the downside when Bitcoin finally prints a bearish candlestick, such as . a shooting star or a tombstone doji.
  • Bitcoin has resistance at the top at $25,772 and $29,321 and support at the bottom at $22,729 and $19,915.

Also see: How much $100 in Bitcoin could be worth in 2030 if Cathie Wood’s price prediction comes true

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