Bitcoin Awaits Triangle Breakout as Price Squeeze Continues

Bitcoin's price is largely unchanged on the day and maybe building for a strong exit from the weeks-long period of consolidation.

The leading cryptocurrency hit highs above $4,100 on Jan. 8 before moving lower to around $3,500, where it's become trapped in a tightening trading range.

Bitcoin is currently trading at $3,550 on Bitstamp, representing a 0.4 percent change on a 24-hour basis.

The probability of a bullish breakout appears high, as the sluggish price action suggests the sellers have run out of steam.

On the previous three occasions, the trading range widened sharply on the following day, so if history repeats, we may see some movement in the next 12-24 hours.

A convincing break above $3,600 on the 4-hour chart would confirm a triangle breakout and open the doors to $3,774.

The descending triangle is widely considered a bearish continuation setup and it often ends up accelerating the preceding move.

View Bitcoin looks likely to witness a triangle breakout in the next day or two.

A triangle breakdown - acceptance below $3,470 - would reinforce the primary bearish trend and boost the odds of a drop toward December lows near $3,100.

Bitcoin image via CoinDesk archives; charts by Trading View.