Market News & Analysis

Top Story

Bitcoin Could Be Coiling Its Way Towards A Breakout

Bitcoin prices are coiling within a tight range after seeing relatively high levels of volatility last week, suggesting it could be preparing for another volatile burst.


We’ve paid close attention to the level of volatility on Bitcoin recently, as leading into Independence Day BTC had hit levels of volatility usually associated with bearish trends, nasty corrections or periods leading up to a crash. However, volatility has subsided and it continues to hold above key levels of support, so we’re keen to see if it will now revert to its bullish trend.


We can see on the daily chart that a bullish hammer tested a Fibonacci cluster just below 10k, and prices are trying to build a new level of support above 10,776. It remains touch and go as to whether it will correct lower once more before completing its retracement, so we’re keeping a close eye on 10,776 and 12,065 zone, as a breakout of either level could pave the way for its next directional move.

But the key point here is that the lower volatility is allowing prices to coil below 12k and, as compression precedes volatility spikes, we could be approaching a breakout (one way or the other).  


Switching to the four-hour chart, a triangle can be seen developing between the 10,776 – 12,065 zone. Furthermore, this could be part of a ‘right shoulder’ of an inverted head and shoulders pattern. Whilst these are typically seen at the end of downtrends, they can also be used as continuation patterns within an uptrend.

  • If successful, the pattern projects a target around 14,290 (just above the highs) if we project the move from the sloping neckline.
  • However, to enter long we’d want to see a break above 12,065
  • A break below 10,776 suggests a deeper correction could be playing out, bringing $10k and $9.1k onto focus as bearish targets.


Related Markets: City Index Platform
Bitcoin Cash ($) CFD Bitcoin ($) DFT
Bitcoin ($) CFD Bitcoin (AUD) DFT
Bitcoin (AUD) CFD Bitcoin (£) DFT
Bitcoin (£) CFD Bitcoin (€) DFT
Bitcoin (€) CFD
Bitcoin ($) Mini (per 10) CFD
Please note these products may not be available to trade in all regions.


Related analysis:
Bitcoin Rallies Its Way To Independence Day
Bitcoin: Do Volatile Bullish Sessions Lead To Further Gains?


Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.