Bitcoin’s Bulls Now Have a Target of $13.2K, Monthly Chart Suggests

Omkar Godbole
Aug 13, 2019 at 11:00 UTC
Updated Aug 13, 2019 at 11:16 UTC
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  • Bitcoin charted an “inside bar” pattern last month, making $13,200 the level to beat for the bulls.
  • A convincing move above $13,200 would imply a resumption of the rally from lows near $4,050 seen in April.
  • A break below $9,049 (July’s low) would confirm a bearish inside bar reversal on the monthly chart.
  • The hourly chart indicates prices could drop below $11,000 in the next 24 hours or so.
  • The bearish case would weaken if lower-highs pattern on the hourly chart is invalidated with a move above $11,431.

Bitcoin (BTC) now needs to break above $13,200 to revive the stalled bull market, a key monthly chart pattern suggests.

The top cryptocurrency by market value created an “inside bar” pattern in July, with the monthly high and low of $13,200 and $9,049, respectively, falling within June’s trading range of $13,880 to $7,432.

An inside bar candle is characterized by a higher low and a lower high than the previous candle, and represents an indecisive market or consolidation in a narrowing price range.

A convincing break above the inside bar’s high is widely considered a sign of a bullish breakout. As such, July’s high of $13,200 is now the level to beat for the bulls.

As of writing, BTC is changing hands at $11,220 on Bitstamp, representing little change on a 24-hour basis.

Monthly and weekly charts

BTC broke into a bull market in April and rose to a 17-month high of $13,880 before creating last month’s inside bar candle (above left).

Coming after a notable uptrend, the pattern suggests bullish exhaustion and an impending bullish-to-bearish trend change.

That said, a bearish reversal would be confirmed only if BTC ends the current month below July’s low of $9,049.

On the other hand, acceptance above $13,200 (July’s high) would signal a continuation of the rally from April’s low near $4,050.

The probability of BTC ending the current month above $13,200 would rise if prices print a bullish weekly (Sunday, UTC) close above $12,000.

As can be seen (above right), the cryptocurrency has failed four times in the last seven weeks to find acceptance above $12,000. Many observers believe a weekly close above $12,000 would imply a continuation of the bull market.

While the argument has merit, a stronger confirmation would be a high-volume move above $13,200.

As for the next 24 hours, BTC risks falling below $11,000.

Hourly and daily chart

BTC has created a lower high at the lower edge of a flag pattern (above left) in the last 24 hours, reinforcing the bearish view put forward by the flag breakdown – a bearish continuation pattern – confirmed yesterday.

Selling volume is again ticking up, validating the bearish setup, while the relative strength index, too, is reporting bearish conditions with a below-50 print. The 5- and 10-day moving averages (MAs) have produced a bearish crossover.

As a result, prices may well drop toward the 5-week moving average, currently at $10,778.

The bearish case would weaken if prices rise above $11,431, invalidating the bearish lower highs setup. In that case, $12,000 could come into play.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via shutterstock; charts by Trading View

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This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.