The Bollinger Bands shows that Bitcoin is in the middle of a consolidation period. Bitcoin’s immediate upside has been limited by the upper boundary of the BB. However, to sustain an uptrend and perhaps ensure that the impending breakout is on the upside, bulls must ensure that the middle boundary is guarded at all costs.
For now, the least resistance path is on the downside as emphasized by the Relative Strength Index. The indicator has resumed the downtrend, abandoning the recovery mission to the overbought area. Selling orders are bound to increase as long as the RSI dives towards the midline and probably the oversold region.
BTC/USD 4-hour chart
Meanwhile, Bitcoin has been accorded immense support, especially at the 50 Simple Moving Average (SMA) on the 4-hour chart. Trading above this moving average is a bullish market and suggests that BTC is in the bulls’ hands despite the consolidation.
On the brighter side, as the Bollinger Bands squeeze, Bitcoin draws closer to a breakout that might end up in a massive price movement towards the coveted $20,000. Some delay should be expected at $19,500 (stubborn resistance). However, trading above $20,000 will see Bitcoin enter another price discovery mode.
Luke has had a long interest in financial technology, especially cryptocurrency and blockchain. With a Bachelors degree in Journalism and Media, Luke is dedicating his writing skills for the digital currency sphere.He can be contacted at email@example.com