Bitcoin Breakout Watch: Donchian Channels Point to Fresh Momentum

Bitcoin's recent rebound from its June lows has caught the attention of traders, who are watching closely for signs of a decisive breakout. The cryptocurrency has climbed back above $64,000, and ETF inflows have returned after record outflows in June.

To spot potential breakouts, traders use Donchian Channels, an indicator developed by Richard Donchian. This tool consists of three lines: the upper band (highest high over 20 candles), lower band (lowest low over 20 candles), and middle band (midpoint between the two).

Donchian Channels are designed to show whether price is making new highs, new lows, or remaining stuck inside a trading range. A break of either band provides a clean, objective signal.