Bitcoin BTC/USD, Ethereum ETH/USD and Dogecoin DOGE/USD were surging over 6%, 11% and 7% on Monday after breaking up bullishly from inside bar patterns the cryptos had developed on their daily charts.
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 tested support at the eight-day and 21-day exponential moving averages (EMAs) on Monday before breaking up above Sunday’s 24-hour trading session high. The move was a bullish reaction to the inside bar pattern that Bitcoin developed during Saturday and Sunday’s 24-hour sessions, with the mother bar printing on Saturday and the inside bar on Sunday.
The move higher caused Bitcoin to rise up above the July 8 high of $22,490, which may indicate a new uptrend is about to form. For an uptrend to confirm, Bitcoin will need to print a higher low above the July 13 low of $18,892.
The Ethereum Chart: Like Bitcoin, Ethereum printed an inside bar pattern during Saturday and Sunday’s 24-hour trading sessions and was reacting bullishly to the formation on Monday. Ethereum tested the 50-day simple moving average (SMA) on Monday and bounced up from the level, which indicates longer-term sentiment is bullish.
When Ethereum tested the 50-day SMA, the crypto printed a slightly higher low, which indicates Ethereum is now trading in an uptrend. Bullish traders can watch for the crypto to print another higher low over the coming days, which could provide a solid entry point for traders who aren’t already in a position.
The Dogecoin Chart: Dogecoin also formed an inside bar pattern on Saturday and Sunday and, like Bitcoin and Ethereum, reacted bullishly to the formation on Monday. While Dogecoin is trading above the eight-day and 21-day EMAs, the crypto has, so far, rejected the 50-day SMA and bullish traders will want to see Dogecoin regain that area over the coming days for more confidence going forward.
Dogecoin is trading in a confirmed downtrend, with the most recent lower high printed at $0.073 on July 8 and the most recent lower low formed at the $0.057 mark on July 13. If the crypto is able to regain the 50-day SMA as support, Dogecoin may have enough power to print a higher high and negate the downtrend.
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