You Ask, We Analyze: Is Bitcoin Consolidating Before An Impending Weekend Run?

On Thursday evening, Benzinga asked its followers on Twitter what they’re buying at the open on Friday. From the replies Benzinga selected one ticker for technical analysis.

@HodlTahoe is buying Bitcoin BTC/USD and noted they “stack the dip and #HODL the rip.” HodlTahoe also stated Bitcoin traders and investors “don’t have to wait for any market to open to buy the dip” because cryptocurrencies trade 24 hours per day.

@dbcstox may be planning to play a Bitcoin move through crypto related stocks and listed Hut 8 Mining Corp HUT, Marathon Digital Holdings, Inc MARA, Riot Blockchain, Inc RIOT and Bitfarms Ltd BITF as stocks they're interested in.

@OGcyclist1987, on the other hand, left Benzinga hanging and posted a gif of a failed skydiving attempt without comment.

Bitcoin has recently tightened its daily trading range and has become less volatile, which signals consolidation. A tight trading range often precedes a larger move to the upside or downside and traders can watch for increasing volume on a break from chart patterns to gauge future direction.

See Also: Bitcoin Bull Anthony Scaramucci Says This Crypto Project Could 'Potentially Flip Ethereum'

The Bitcoin Chart: Bitcoin has been trading in a fairly consistent downtrend since printing a new all-time high of $69,000 on Nov. 10. Over the past five 24-hour trading sessions, however, the apex crypto has failed to make a lower low below the most previous low at the $53,327 mark made on Nov. 28.

The crypto may be trading in a falling channel on the daily chart, between two parallel trendlines. Over the past five trading days, the crypto has attempted to break up from the upper descending trendline but has failed and wicked from it. Because Bitcoin is trading above the median line of the channel a break upwards from the pattern is more likely, although further consolidation may be needed before that happens.

It's possible Bitcoin printed a double bottom pattern near the $55,910 level on Tuesday and Thursday. If the pattern is recognized traders can watch for Bitcoin to rise up higher over the weekend. It is also possible Bitcoin may retest the level as support and create a triple bottom pattern before breaking north although it should be noted that if the crypto falls below the level the patterns will be negated.

Bitcoin is trading slightly below the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The crypto is also trading below the 50-day simple moving average, which indicates longer-term sentiment is bearish.

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• Bulls want to see big bullish volume come in and break Bitcoin up from the falling channel pattern and for the crypto to print a higher high above Nov. 30 higher low at the $59,249 level. The crypto has resistance above at $58,943 and $61,744.
• Bears want to see big bearish volume drop Bitcoin down to print a lower low and confirm the downtrend is still intact. There is support below at $55,625 and $52,666.