Βitcoin - BTCUSD
Once again, the Bitcoin price has a hard time breaking a level. It struggled for months at $10,000, only to stall at the $12,000 one. For the entire month of August, Bitcoin just hovers around with little or no interest to join the USD move lower.
However, the current consolidation still holds a bullish bias. Bitcoin price continues to form higher highs and higher lows – a prerequisite for any continuation pattern. If we are to consider the inversed head and shoulders pattern’s measured move too, then the next level of reference is $15,000.
There is more and more chatter on the market that central banks are thinking of introducing their own digital currencies. In fact, China already did so, as it is expanding this month the program for its digital yuan.
The idea behind these digital currencies is that they are expected to work exactly like physical money, but only that they are digital currencies existed only online. In other words, they represent a threat to Bitcoin because a digital central bank’s currency is just competition. A competitive environment is always healthy, and the innovation here is that the digital central banks’ currencies will operate in a regulatory framework, whereas Bitcoin is not.
The overall technical picture does look bullish. If we drag the neckline on the inversed head and shoulders pattern, the recent breakout seems to be just the start of a sustained bullish trend.
However, twenty-five days into the month of August and Bitcoin price still consolidates the recent levels. To avoid being trapped in an even longer consolidation, bulls might consider placing a pending buy stop order at $12,500. Such a move means Bitcoin puts a new higher high in place, confirming the bullish scenario. Moreover, it shows strength and the ability to continue its advance for the measured move.
