The consolidation into the flag formation has helped Bitcoin to cool off its relative strength index (RSI) which was approaching the 70% level on Friday. When a crypto or stock’s RSI reaches over the 70% level it is a sell signal for technical traders. When Bitcoin reached an RSI of over 70% on July 30, Aug. 7, Aug. 9 and Aug. 13 sellers came in and dropped the crypto into consolidation.
The low trading volume on Bitcoin also signals the slightly lower prices are a consolidation. Bears should look for high volume on a move lower to feel confident the rally is over.
Bitcoin is trading above the eight-day and 21-day exponential moving averages (EMAs) with the eight-day EMA trending above the 21-day, both which are bullish indicators. The crypto is also trading above the 200-day simple moving average which indicates overall sentiment is bullish.
- Bulls want to see big bullish volume come in and break Bitcoin up bullishly from the flag. The crypto has resistance above at $48,817 and $51,191.
- Bears want to see big bearish volume come in and drop the crypto down out of the flag pattern and below support of the eight-day EMA. Bitcoin has support below at $44,850 and $42,223. Source https://finance.yahoo.com/news/bitcoin-preparing-explosive-bullish-break-173332461.html