The Bitcoin price has been trading sideways for the entire month of June. The lack of conviction from bears and bulls has led to a doji that is currently in the monthly timeframe of the BTCUSD charts.
If the cryptocurrency closes around the current levels tonight, the doji will be confirmed. However, previous data suggests that this is not a bad thing for Bitcoin and could precede a strong bullish move.
Market cycles, repetitive patterns, and more: cryptanalysts rely on historical data to help them make decisions
Bitcoin is a relatively young commodity in the financial world with just over a decade. For this reason, analysts only have a small sample size to compare current price trends with historical ones.
In the country of the cryptocurrency, things may not work the same way a second or third time. However, the markets are cyclical and history repeats itself frequently.
Fractal or repetitive pricing patterns exist for these very reasons and are very common.
Other repeating chart patterns, such as triangles and wedges, can tell traders what the next step could be. Japanese candle holders also serve this purpose and are therefore popular with dealers who perform technical analysis.
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These candle holders also form patterns or can act as signals on their own. Doji are just a kind of unique Japanese candlestick that can give meaningful clues as to what comes next.
Doji show indecisiveness in the markets and act either as a prelude to a reversal or as a strong continuation. Occasionally, Doji forms in a cluster and pulls out indecision until an explosive outbreak occurs.
One of these indecisiveness candles will form in monthly BTCUSD price charts if the cryptocurrency continues to trade at the current level.
Bitcoin Monthly Doji tends to continue upward, as data show
Doji candles and indecision are not always bad. They are often at the top or bottom of a trend, just as this previous trend is reversed. Doji can be an important signal for traders to be alert and watch out for an outbreak.
However, if this breakout goes in the direction of the previous trend, Doji can be a prelude to a strong continuation in the primary direction.
Bitcoin prices have risen since the low on Black Thursday in mid-March. The following month in April was closed as a bullish devotion to highlight the importance of monthly candlesticks.
Upward candles signal a short-term turnaround. What comes after that is what does things from short to long term. May closed green, and now consolidation and indecision in June are leading to a doji.
But Data from previous Doji candles within 3.5% or lesshave caused upper ore eruption in more than 50% of cases. Bitcoin is working on its tenth doji in a monthly period within a range of 3.5% or less.
Bitcoin BTCUSD Monthly | Source: TradingView
Five of the previous nine times have led to a long-term upward movement. Two of the cases led to a massive upward movement, followed by a bearish reversal.
The last two times occurred shortly after setting a new high and led to a long-term downward trend.
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So far, all doji with negative performance have caused an upward break. When Bitcoin closes at current prices below $ 9,200, the monthly close falls into this negative category.
Things could change within the next few hours before monthly closing. Most importantly, what comes after graduation.