A look at Bitcoin heading into the weekend: Will Dogecoin, Ethereum be affected?

by James · August 5, 2022

Bitcoin BTC/USD traded mostly during Friday’s 24-hour trading session after trying to break out bullishly from a descending channel pattern on the daily chart, which the crypto has been stuck in since July 29.

Bitcoin’s 24-hour trading range has tightened significantly of late, offering little volatility for day traders who are attracted to Bitcoin and other cryptos due to their historical wild price action.

Dogecoin DOGE/USD and Ethereum ETH/USD has followed Bitcoin, trending slightly lower since late June, although Dogecoin and Ethereum were slightly stronger on Friday, trading up over 2% and 3% respectively. Because Dogecoin and Ethereum show relative strength to Bitcoin, if the apex crypto can break out of its falling channel pattern over the weekend, Dogecoin and Ethereum are likely to gain momentum.

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The Bitcoin Chart: Bitcoin is trading in a confirmed downtrend within the descending channel, with the last low high pressured on Wednesday at $23,650 and the last confirmed higher low formed at $22,392 on Thursday. If Bitcoin continues to trade lower during Saturday’s 24-hour session, Friday’s intraday high will mark the next low within the pattern.

If Bitcoin bullishly breaks out of the descending channel over the weekend, the measured move is about 7.6%, suggesting that Bitcoin could shoot back up towards the $24,400 level. Patterns in stocks and cryptos often repeat themselves, making a breakout from the channel likely because when Bitcoin last traded in a descending channel pattern, between July 20 and July 26, the crypto broke out of the pattern and rose 15%.

If Bitcoin closes the 24-hour trading session near the opening price, the crypto will hit a tombstone doji candlestick, which may indicate that lower prices will return on Saturday and the crypto will continue to trade in the descending channel. If the crypto gains bullish momentum later on Friday and approaches today’s high price, Bitcoin will hit a bullish Marubozu candlestick, which could indicate higher prices in the cards for the weekend.