• The 4H chart indicates that Bitcoin is trading in a narrowing Bullish pennant, indicating consolidation.
• The RSI ranges between 45 and 49, which indicates a lack of direction and a weak momentum.
• The MACD lines are below +0, and the histogram bars are getting smaller, which shows the diminishing volatility and uncertainty.

Bitcoin trades in a bullish pennant in the 4-hour chart, indicating indecision in the market. Its present formation follows a strong push upwards in the first couple of weeks of this month. The price action is also budgeted within an uplifting support line and a falling resistance trending line, gradually squeezing out the trading range. Such structures can commonly be preceded by an intense bull trend, which was observed in Bitcoin between July 9 and July 14, following which a period of consolidation opened.

Price Structure Compresses With Resistance and Support Holding Around $116,000

On the technical front, BTC/USD is trading between two converging trendlines, forming a textbook bullish pennant. The upper resistance line currently lies around the $121,000 level, while support is found near $116,000. 

Despite multiple intraday wicks on both ends, price has respected the pattern’s boundaries. Notably, the market printed lower highs after the July 14 peak, while higher lows have developed gradually since July 15. This structural compression suggests a potential buildup of momentum, though no breakout has occurred yet.

Technical Indicators Reinforce Ongoing Price Consolidation

In line with the consolidation theory, Relative Strength Index (RSI) on the hour chart is still stuck between 45 and 49. These readings show a lack of directional momentum as sellers and buyers cancel each other out. 

Meanwhile, the Moving Average Convergence Divergence (MACD) supports low volatility. The MACD line is standing at -78.12, and the signal line is standing at -61.05. The histogram has converged, which means shrinking divergence among the two lines. Together, these indicators add support to the narrowing pattern seen on the higher timeframe

Volatility Contracts as Bitcoin Awaits Next Move Within Tightening Technical Formation

In its entirety, the current technical base and the momentum indicators of Bitcoin suggest a trading base range and lower volatility in the market. Every price trend within the pennant is contained, which is neutral over the short run. 

Traders still watch the higher and lower limits of the structure to see when it might break out, again either upward or downward. Even at the current time, the market is directionless, and no clear trend has developed as a result of the ongoing consolidation.