Bitcoin BTC/USD was trading about 3% higher during Saturday’s trading session on continued momentum after breaking up bullishly from a falling channel pattern on July 27, which Benzinga pointed out on July 25.
During Friday’s session, Bitcoin negated the downtrend it had been trading in within the falling channel, but hasn’t yet confirmed a new uptrend on the daily time frame.
An uptrend occurs when a stock consistently makes a series of higher highs and higher lows on the chart.
The higher highs indicate the bulls are in control, while the intermittent higher lows indicate consolidation periods.
Traders can use moving averages to help identify an uptrend, with rising lower time frame moving averages (such as the eight-day or 21-day exponential moving averages) indicating the stock is in a steep shorter-term uptrend.
Rising longer-term moving averages (such as the 200-day simple moving average) indicate a long-term uptrend.
A stock often signals when the higher high is in by printing a reversal candlestick such as a doji, bearish engulfing or hanging man candlestick. Likewise, the higher low could be signaled when a doji, morning star or hammer candlestick is printed. Moreover, the higher highs and higher lows often take place at resistance and support levels.
In an uptrend the “trend is your friend” until it’s not, and in an uptrend there are ways for both bullish and bearish traders to participate in the stock:
- Bullish traders who are already holding a position in a stock can feel confident the uptrend will continue unless the stock makes a lower low. Traders looking to take a position in a stock trading in an uptrend can usually find the safest entry on 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 a reversal into a downtrend may be in the cards.
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The Bitcoin Chart: Bitcoin began Saturday’s 24-hour session by printing an inside bar pattern and by late morning, the crypto was attempting to break up from Friday’s trading range. If Bitcoin closes the trading session near its high of day price and above Friday’s high of day, the crypto will print a bullish Marubozu candlestick, which could indicate higher prices are in the cards for the Sunday session.
- Eventually, Bitcoin will need to retrace to at least print a higher low, which would confirm a new uptrend. If that happens, traders can watch for the crypto to form a bullish reversal candlestick, such as a doji or hammer candlestick above $20,715, which is the most recent low.
- A pullback is likely to come over the next few days because Bitcoin’s relative strength index (RSI) is measuring in at about 64%. When a stock or crypto’s RSI nears or reaches the 70% level, it becomes overbought, which can be a sell signal for technical traders.
- Traders can watch for a reversal to the downside to take place when Bitcoin eventually prints a bearish candlestick, such as a shooting star or gravestone doji.
- Bitcoin has resistance above at $25,772 and $29,321 and support below at $22,729 and $19,915.
See Also: How Much $100 In Bitcoin Could Be Worth In 2030 If Cathie Wood’s Price Prediction Comes True
Image and article originally from www.benzinga.com. Read the original article here.