Bitcoin (BTC) has been trading sideways since falling sharply on May 12. BTC is routinely bouncing off the highs and lows of the £22,700–£24,400 range, the area of the ongoing consolidation.
Bitcoin reached a local low of £20,200 on May 12 to cap the decline. The daily doji candle on the day had large lower wick, and the largest daily trading volume since May 19 2021 confirmed the capitulation.
With a false breakout on May 15, bitcoin has been trading between £22,700 and £24,400 since then. The daily close price has not fallen below £22,800.
On the daily timeframe, technical indicators show mixed results, which is characteristic of a consolidation period. The RSI is hovering at 40 and gradually climbing in the neutral zone. In the meantime, the MACD histogram is still quite overbought.
The RSI, however, appears to have broken out above the descending resistance line, confirming it as support. Furthermore, for the past seven days, MACD posted a bullish cross and has been increasingly creating bars of positive momentum.
The short-term sideways trend is likewise confirmed by technical indicators on the four-hour chart. Since May 12, the RSI chart has followed a parallel channel within a small range, which has its median almost at the neutral level of 50.
The histogram of MACD is about exactly at total neutrality zero, and the negative and positive momentum bars are weakening. The BBWP volatility indicator, which is approaching the minimum volatility area, confirms this.
A symmetrical triangle has also been formed on the four-hour chart. According to statistics, both a breakout and a breakdown from this pattern are equally likely. At the time of writing, the BTC price is testing the triangle’s lower edge once more.
A breakout will place target at the CME gap from May 6 to 9 near £27,800. The £19,900 level will be the goal if a breakdown occurs.