Benzinga - Bitcoin (CRYPTO: BTC) was consolidating during Friday’s 24-hour trading session, in tandem with spot gold, which was trading flat.
The apex cryptocurrency and gold settled into inside bar patterns on the daily chart, while Ethereum (CRYPTO: ETH) and Dogecoin (CRYPTO: DOGE) followed suit, forming the same consolidation pattern.
In contrast, the general market was spiking higher, with the S&P 500 climbing about 0.6%.
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 started to rebound on April 26 after forming a rounded-bottom pattern beginning on April 20. On Thursday and Friday, Bitcoin was forming a double inside bar pattern to consolidate the rebound.
Traders and investors can watch for the crypto to break up or down from Wednesday’s mother bar on higher-than-average volume on the weekend to indicate future direction. The consolidation pattern leans bullish because the crypto was trading higher prior.
Bitcoin has resistance above at $31,418 and $35,593 and support below at $28,690 and $25,772.
The Ethereum Chart: Like Bitcoin, Ethereum was working to print a double inside bar pattern on Friday, with the last two days’ price action taking place within Wednesday’s range. Like Bitcoin, Ethereum’s inside bar lean slightly bullish but traders can watch for a break of the pattern on higher-than-average volume.
If Ethereum breaks down from Wednesday’s mother bar, bullish traders can watch for the crypto to reverse and bounce up from the 50-day simple moving average (SMA), which has been acting as support since April 24.
Ethereum has resistance above at $1,957 and $2,150 and support below at $1,846 and $1,717.
The Dogecoin Chart: Dogecoin was also printing a double inside bar pattern on Friday and holding above support at the 50-day SMA. If Dogecoin breaks up from the pattern, bullish traders will want to see the crypto regain the 200-day SMA as support.
For Dogecoin to regain that level, much more volume will be needed. Dogecoin has been trading on lower-than-average volume recently, which indicates a current lack of interest in the crypto.
Dogecoin has resistance above at $0.083 and $0.091 and support below at $0.075 and at 7 cents.
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