Symmetrical Triangle Signals Further Sideways Trading

Despite A buildup of energy culminating all year formed by a bearish trend line that served as resistance that started all the way at the yearly high at $10,670 on February 13th on the upside. On the other end we had upward pressure from the support line drawn starting from the low of this year at $4,210 hit on March 12th. These two trend lines formed a compression triangle that contains all the action witnessed so far this year.

This symmetrical pattern in CME futures I have drawn in using green solid lines on our first chart which is a four hour candlestick chart of BTC futures. Not only does this time sequence show us just how many times these trend lines were tested but also a false breakout that occurred on Wednesday of this week in which it broke below, then above only to close back within the boundaries by the close of the day. However on closer inspection we see that when it did break out to the upside intra-day Wednesday it did so in a very strong fashion. This candle that represents the time frame of the New York markets open Begins at the 38% retracement of our new short term Fibonacci retracement has an absence of a lower wick and is a very large bodied candle forming a bullish opening bozu. This single candlestick is of interest as you may notice it is the exact opposite and in the same price range of Monday’s opening candle, a bearish closing bozu. That first candle on Monday also created a intra-weekend gap that has yet to be closed.

So what does all this mean for Bitcoin? First and foremost although technically we broke to the upside, it was not a true break with any real spike in price or volume, this tells us that sideways action will probably be present for a while. However on our four hour chart the action described above is moderately bullish. This along with the fact that the 21-day exp. moving average that ran through the apex of the triangle was taken out and should act as tentative support tells me that sideways action will continue into next week and when volatility re-enters BTC will more than likely head to the upside.