Bitcoin BTC/USD was consolidating during Friday’s 24-hour trading session after the Personal Consumption Expenditure (PCE) Price Index report showed core PCE for August cooled to its lowest point since September 2021.
Ethereum and Dogecoin were trading slightly stronger than Bitcoin, rising above Thursday’s high-of-day, while Bitcoin formed an inside bar pattern.
An inside bar pattern indicates a period of consolidation and is usually followed by a continuation move in the direction of the current trend.
An inside bar pattern has more validity on larger time frames (four-hour chart or larger). The pattern has a minimum of two candlesticks and consists of a mother bar (the first candlestick in the pattern) followed by one or more subsequent candles. The subsequent candle(s) must be completely inside the range of the mother bar, and each is called an “inside bar.”
A double, or triple inside bar can be more powerful than a single inside bar. After the break of an inside bar pattern, traders want to watch for high volume for confirmation the pattern was recognized.
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The Bitcoin Chart: Bitcoin regained the 50-day simple moving average (SMA) on Thursday, which has been acting as heavy resistance since July 26. On Friday, the stock was consolidating above the 50-day SMA and forming an inside bar, which is bullish for price action over the weekend.
Bullish traders want to see Bitcoin break up from Thursday’s mother bar on higher-than-average volume, which could confirm a new uptrend. If that happens, the crypto is likely to find resistance at the 200-day SMA.
Bearish traders want to see big bearish volume come in and knock Bitcoin back under the 50-day, which would suggest Thursday’s price action was a bull trap and the downtrend will continue.
Bitcoin has resistance above at $27,133 and at $28,690 and support below at $25,772 and at $24,206.
Like Bitcoin, Ethereum and Dogecoin have been unable to negate their downtrends with the formation of either a higher high or a higher low. If the cryptos retrace over the weekend but hold above the moving averages that were mentioned, higher lows will form, which would set Ethereum and Dogecoin into possible uptrends.
Ethereum has resistance above at $1,717 and at $1,825 and support below at $1,615 and at $1,564.
Dogecoin has resistance above at $0.061 and at $0.065 and support below at 6 cents and at the $0.057 mark.
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