Bitcoin Forecast: Price Range Constricts as BTC Awaits Breakout

Bitcoin Price Outlook:

• Bitcoin has traded cautiously lower since its recent peak in late June, now the coin is quickly running out of room in its technical formation

• Therefore, it may only be a matter of time until BTCUSD breaks out

• Bitcoin Price Correlations with Emerging Markets FX: USD/CNH, USD/ZAR Lead the Way

Bitcoin Forecast: Price Range Constricts as BTC Awaits Breakout

Bitcoin prices have slipped roughly -28% since the cryptocurrency surged in late June. Since topping out, the coin has posted a series of lower highs and higher lows. The consolidating price action has resulted in the formation of a bull-flag which – as its name suggests - is typically believed to be a bullish pattern.

Bitcoin Price Chart: Daily Time Frame (January – September)

Created in TradingView

That said, there are some lingering concerns for bitcoin. On the fundamental side, a commendable recovery from various emerging market currencies has worked to erode a key tailwind for the cryptocurrency.

Evidently, bitcoins current landscape is precarious despite its seemingly bullish formation. Repeated tests of support and lower highs do not speak to bullish commitment and chart patterns do not always deliver on the signal they offer. With that in mind, traders should continue to watch the ascending trendline that has helped to keep price afloat since June. A confirmed break of this level would likely open the door lower, down to the 200-day moving average and the $7,093 level slightly lower.

On the other hand, if bulls can capitalize on the bullish formation, bitcoin could look to extend gains beyond the $11,526 mark which has offered moderate technical influence in the past. Prior swing highs from recent months will likely look to offer subsequent resistance before BTCUSD can test the 61.8% Fib at $13,507. As bitcoin becomes increasingly trapped between technical levels and traders await a break, follow @PeterHanksFX on Twitter for updates.