On Friday Bitcoin (CRYPTO: BTC) was consolidating the bullish break up from a descending trendline Benzinga called out.
The apex cryptocurrency has been working to erase losses from a flash crash brought on the day El Salvador adopted Bitcoin as legal tender.
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The Bitcoin Chart: In its consolidation Bitcoin has settled into a bull flag pattern with the pole created between Tuesday and Wednesday and the flag formation on Thursday and Friday. The bull flag will remain a valid pattern unless the crypto retraces more than 50% of the length of the pole over the weekend.
By late afternoon on Friday Bitcoin’s trading volume was low at just 6,257 compared to the 10-day average trading volume of 11,388. The low volume confirms Bitcoin is in a consolidation phase because although there are sellers taking profits there are not enough sellers to create fear and when a stock or crypto drops lower on low volume technical traders view it as bullish.
Bitcoin is trading in line with the eight-day and 21-day exponential moving averages but the eight-day EMA is trending slightly below the 21-day, which indicates indecision. The crypto is trading above the 200-day simple moving average, which indicates overall sentiment is bullish.
- Bulls want to see continued consolidation on low volume and then for big bullish volume to come in and drive Bitcoin up through the top of the descending trendline of the flag pattern. The measured move, if Bitcoin breaks bullishly from the bull flag, is approximately 8% which could put Bitcoin at the $50,000 mark in the near future. The crypto has resistance above $48,475 and $50,505.
- Bears want to see increasing bearish volume come in and drop Bitcoin down through the bottom of the flag pattern which will cause the crypto to lose a support level at $46,718. Below the level, Bitcoin has support at $44,850 and $42,233.