The world’s leading cryptocurrency has been unable to produce a convincing bullish breakout over the past four months.
Throughout 2018 BTC has set lower price highs, which suggest the direction of least resistance is to the downside, Coin Desk reports.
But a failure to beat a key support, the 21-month exponential moving average (EMA), hints the sell-off from the $20,000 (£15,350) price high reached in December 2017 may have run its course.
Following the indication from the failure to beat EMA support, conditions are poised for BTC to leap above the recent lower price high of $7,429 (£5,700) to pave the way for a bearish-to-bullish trend.
Hacked reported on Friday Bitcoin’s price was on the verge of a major breakout.
The predication came as a key momentum indicator crossed the Relative Strength Index (RSI) for the fourth time this year.
An analysis based on RIG trend lines maintains each of the previous three crossovers produced a sharp vacillation in prices.
When the last crossover happened in mid-August, the digital asset experienced a 21 percent spike in value.
September 2018 was Bitcoin’s narrowest monthly trending range since July 2017, according to Coin Desk.
And the monthly rating volume throughout September was the lowest since April 2017, according to data from one of the world’s largest cryptocurrency exchanges, Bitfinex.
Periods of low volatility often reach a calamitous conclusion for the Fin Tech asset, particularly when accompanied by low volume.
These trends suggest the cryptocurrency is braced for a decisive move in either a bullish or bearish direction.
But Bitcoin’s healthy price floor suggests the market has a vested interest in preventing blues from falling any further – in another sign a bearish trend could be imminent.
Fundstrat’s Tom Lee believes Bitcoin will finish the year on a strong note.
He said: “$6,000 (£4,600) is a level that is more important than we realised.
“Earlier this year, we were pointing $6,000 (£4,600) as breakeven for Bitcoin mining so that level should hold.
“The fact Bitcoin is holding here is very good news.
“I think there are catalysts in the year-end so I think despite the lower highs we’ve seen I think we’re starting to reverse.”
Cryptocurrency is a volatile asset and is subject to huge variations in its value.
Nicky Morgan, the chair of the UK’s Treasury Committee, has described Bitcoin as a gamble, rather than an investment.
She said: “Bitcoin and other crypto-assets exist in the wild west industry of crypto-assets.
“This unregulated industry leaves investors facing numerous risks.
“Given the high price volatility, the hacking vulnerability of exchanges and the potential role in money laundering, the Treasury committee strongly believes that regulation should be introduced.”