Bitcoin (BTC) is lacking clear directional bias at press time, having failed to capitalize on a bullish breakout on Monday.
The top cryptocurrency has spent much of the last 20 hours trading the narrow range of $10,200–$10,400.
Prices dropped to a one-week low of $10,060 at 08:10 UTC yesterday, signaling a potential resumption of the sell-off from Friday’s high of $10,950. The drop to the seven-day low was short-lived, though, and BTC rose well above $10,500 by 11:20 UTC, confirming a bullish breakout on the hourly chart.
The falling wedge breakout implied an end of the pullback from recent highs and a resumption of the rally from the Aug. 29 low of $9,320.
The bullish setup, however, failed to draw bids and prices fell back to $10,250 at 16:40 UTC, as seen in the chart below.
The failed breakout has neutralized the bullish hourly chart setup.
Some observers consider failed breakouts as a warning of impending sell-off. So far, however, the downside has been restricted below $10,200.
The outlook will remain neutral as long as prices are holding above $10,060 – the low of the doji candle that applied the brakes on the sell-off yesterday and fueled a price bounce to levels above $10,500.
If prices break below $10,060, the bearish setup seen on the daily chart below would gain credence, possibly leading to a deeper drop to $9,750.
BTC fell from highs near $10,950 to $10,280 on Friday, engulfing the price action seen in the previous three trading days.
Essentially, Friday’s sell-off marked a downside break of the consolidation, represented by Wednesday’s spinning top candle and Thursday’s doji candle. The bear grip would further strengthen if the hourly chart support of $10,060 is breached.
The outlook would turn bullish if and when prices manage to print a UTC close above the bearish lower high of $10,956 created on Aug. 20.
As of writing, BTC is changing hands at $10,270 on Bitstamp, representing a 0.84 percent gain on a 24-hour basis.
While BTC is wavering, ethereum’s ether (ETH) cryptocurrency, the second-largest by market value, is better bid above $180 on Bitfinex.
ETH jumped by 5.35 percent on Saturday, confirming a falling-wedge breakout – a bearish-to-bullish trend change. So far, the upside has been capped around $185.00.
However, the cryptocurrency produced a candle with long wicks yesterday, marking indecision in the market place. So now, $186 (Monday’s high) is the level to beat for the bulls.
A UTC close above that level would add credence to the falling-wedge breakout and open the doors to $204 (Aug. 19 high).
On the downside, acceptance below $176 (Monday’s low) will likely invite selling pressure, yielding a retest of the recent low of $164.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; charts by Trading View
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