Bitcoin has formed lower highs and higher lows to create a symmetrical triangle on its 4-hour chart. Price is just bouncing off the bottom of the triangle and may be due for a test of the resistance at $7,200.
However, the 100 SMA looks prime for a bearish crossover from the 200 SMA to indicate a pickup in selling pressure. Then again, these moving averages could simply be oscillating to reflect range-bound conditions. In any case, the indicators are also holding as dynamic resistance at the moment so sellers might have the upper hand.
Besides, RSI is turning south from the overbought zone to signal a return in selling pressure. This could lead to a break below the triangle support and a sustained slide, possibly the same height as the triangle pattern. Stochastic is also heading lower to signal the presence of selling pressure.
Bitcoin has been on weak footing over the past week but bulls don’t seem to be letting up either. The SEC temporary suspension on Bitcoin Tracker One has dashed hopes of seeing the bitcoin ETF applications approved later this month, but positive updates later on in the week managed to stem losses.
For one, it was reported that blockchain industries could add $1 trillion to global trade over the next ten years, so the focus has been on institutional interest and industry developments again. In addition, Morgan Stanley is reportedly considering offering Bitcoin swaps for its clients, also overshadowing rumors that Goldman Sachs is ditching plans to open a bitcoin trading desk. Earlier on, it was also reported that Citigroup is looking into crypto-based products for its customers.
If the spotlight stays on these kinds of updates in the week ahead, Bitcoin could see further upside. It might even break past the triangle top on any indication that the SEC might be giving the thumbs-up to the pending bitcoin ETF applications.
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