What Exactly Is This Bitcoin Chart Telling Us?

Technical analysis of markets is done by studying charts. Currently the Bitcoin chart is making some very interesting moves.

Trends in the price of coins can be seen easier when looking at it in a visual form. Trends are determined by a series of higher highs, or lower lows. This shows you that the price of Bitcoin is willing to make a lower or higher price on each subsequent level in a trend.

When analysts notice a trend they can often draw a trend line over the tops (for a down trend) or under the lows (for an up trend).

On this chart below I marked the last possible series of highs which kept Bitcoin in a confirmed down trend.

Since Bitcoin broke above this trend line price seems to have stabilised quite a bit. It’s also no coincidence that other alt coins have also been gaining some ground.

bitcoin-chart

But a new trend is not always the obvious choice of direction for a price. As is often in cases where a line is broken price can consolidate or “chop around” in a range before the market takes it in a new direction.

While these periods of consolidation take place you can expect some rises and falls, many can be short lived. For the trend to be confirmed in an upward direction the keep an eye on the Bitcoin chart. Look for the price to make a new high, then fall back to make a low which is higher than the last low area.

After this happens the next move upward could be significant. Let’s hope it happens.