Bitcoin has been consolidating inside a long-term triangle pattern for quite some time now but might be due for a breakout soon. The price is hovering close to the resistance as it trades inside a short-term bullish channel, possibly building enough energy for an upside break.
However, the 100 SMA is below the longer-term 200 SMA on the daily time frame to indicate that the path of least resistance is to the downside. In other words, a downside break might be more likely to happen than an upside one. In that case, Bitcoin could slump by the same height as the triangle, which spans around $6,000 to $10,000.
It’s worth noting that the gap between the moving averages is narrowing enough to signal that bearish pressure is slowing. The 100 SMA is still around the top of the triangle, though, so there may be some sell orders at this dynamic inflection point.
In addition, stochastic is on the move down to show that sellers are regaining the upper hand. This oscillator has plenty of room before reaching oversold conditions, so bears could stay in control for a bit longer. RSI is treading sideways on middle ground to reflect range-bound conditions, possibly leading to another test of the triangle bottom.
While there is still some degree of caution as traders await the SEC decision on Bitcoin ETF applications, the mood has been slightly more positive in the past few days. For one, the reversal of Google’s ban on Bitcoin and ICO ads represented a thumbs-up in favor of regulatory efforts and also revives general public interest in cryptocurrencies.
Fundstrat’s survey revealed that more than 50% of institutional investors think that bitcoin has already bottomed out, which means that the anticipated rebound for the year is already underway. Price forecasts range beyond $15,000 as optimism abounds, but an upside triangle break might be needed to convince more bulls to charge.
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