Bitcoin price has almost reached maximum consolidation inside a descending triangle pattern today, having spent the last 3 days narrowly range bound between $9400 and $9580.
Bitcoin Daily Chart
On the daily BTC/USD chart we can see how Bitcoin has made 4 lower lows over the past 20 days and found reliable support twice at the $9,400 level. By connecting these points, we can see that a bearish descending triangle has formed which paints a less than favourable picture for the asset going into the rest of this week.
Right now, Bitcoin price 00 has effectively reached consolidation in between these two pinching levels which typically means that a breakout to the downside is imminent. Looking at trading volume, we can see that progressively fewer trades have been taking place since BTC entered the descending triangle, and that candles have been increasingly bearish.
Looking across across to other indicators, it’s clear that the RSI has also become tightly range bound as volatility slackens off, and the 10MA has now bearishly crossed beneath the 50MA.
From this it looks likely that Bitcoin bears will break the $9,400 support soon and eye new monthly lows, potentially around the $8,788 and $8,248 supports below.
Bitcoin Monthly Chart
When we look at the monthly BTC/USD chart, we can see further bearish signals appear. After tomorrow, we will begin a new monthly candle on the chart. Unless bullish traders are able to miraculously drive BTC back up to the monthly open at $10,760 – over 11% from its current market price – then Bitcoin will close in the red for the first time since January this year.
This could potentially signal to traders that the 2019 bull market has cooled off and is now starting to heavily correct. According to historical data featured in a Bitcoinist article last month, this would actually make a lot of sense given that August is renowned to be the worst time of the year for Bitcoin. Since 2010, BTC price has fallen around 14% during the 8th month which, from its current price, would mean that we could see Bitcoin decline as far as $8,300 over the next 4 weeks.
Despite this bearish outlook, the lagging MACD indicator does appear to be favourably bullish right now with a positive MA convergence and buying volume increasing on the histogram. This seems to suggest that the overall trend still remains positive even though the price seems primed for a correction soon.
Where do you think Bitcoin price is heading over the next 4 weeks? Let us know your thoughts in the comment section below!
Images via Shutterstock, Bitcoin charts by Tradingview
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