Consolidation within a common and strong continuation pattern continues. The length and end of this consolidation can be measured and determined.

 

Bitcoin remains in a bullish pennant

One of the most common and frequently occurring continuation patterns is a pennant. Along with pennants are flags. Flags are rectangular channels while patterns are triangles (symmetrical, ascending, descending, etc). Pennant and flag patterns occur after there has been a sustained and trending move – this is what is called a ‘pole’ or a ‘flagpole’. That pattern is a prerequisite for any flag or pennant. On Bitcoin’s chart, there has been a bullish pennant that has developed and has existed since June 27th, 2019. Now, no one who has been involved in cryptocurrencies and has been involved through the great bear market of 2018 wants to see prolong consolidation. Anxious and concerned traders want to see Bitcoin in a continued bullish move creating new yearly highs and pursuing even higher highs. But patterns like the bullish pennant are necessary, common and even desirable. They are desirable because any triangle pattern has a particular set of ‘rules’ attached to it and how to trade it.

 

Triangles

Out of all the possible geometric patterns that markets form, triangles are the most common and some of the most complex. Traders and analysts are given a significant amount of discretion when deciding to how to draw triangles – especially when you consider particular markets or whether drawing from the body or wick of a candlestick is the most appropriate. Regardless, there are some common behaviors that traders should look for in a triangle prior to a breakout. One of the first things to know is that price will often break out of the triangle in the last third of the triangle. This does not mean it always happens, but it is one of the most common. Another common behavior that price will exhibit prior to a breakout is a combination of volume and price. Price action will often come to a halt or seemingly pause while volume seems to drop off by a significant amount. Then, just prior to (or after) a breakout, a significant surge in volume occurs.

 

Bitcoin’s current behavior in the bullish pennant

Bitcoin is presently continuing a bounce from the bottom of the current triangle is just a hair above the 50% level of the upper and lower trendlines. From a time-based perspective, Bitcoin is at or very near the final third of the current triangle. Volume has also dried up considerably over the past few days, although much of the drop should be attributed to the weekend and Summer weather (fewer participants). However, I would anticipate that Bitcoin won’t move out of this current triangle until closer to September 2nd, 2019. There is a square of price and time on September 2nd at the price level of 9462.40. September 2nd is a time pivot in the Law of Vibration and is one of the most powerful time pivots in the current Law of Vibration cycle. If we are to assume that Bitcoin continues a mostly bullish tone throughout the remainder of 2019, then continued consolidation until September 2nd would be desirable – especially because the next time pivot, the 4/8th-time pivot, occurs on October 20th, 2019. Prices often trend between the pivot on September 2nd and October 20th. Likely price targets are 15,123.25 on the conservative side and above 20,164 on the aggressive side.