Bitcoin price recently busted through several key resistance levels and consolidation patterns to indicate that gains are in the cards. However, price is currently consolidating around the $6,800 level while traders wait for more directional clues.
A small symmetrical triangle can be seen but this also looks like a bullish flag pattern on the longer-term charts. This could be seen as a classic continuation signal, with a break past the resistance sending Bitcoin up by the same height as the flag mast, which spans around $1,000.
The 100 SMA recently crossed above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, the uptrend is more likely to gain traction than to reverse. However, stochastic is starting to dip into the overbought zone to signal rally exhaustion, which might lead to a dip in Bitcoin price. The moving averages could still hold as dynamic support around the middle of the range.
RSI is still treading sideways to reflect consolidation, barely providing any hints on which direction the flag might break. A downside move could lead to a test of the moving averages at $6,500 or a drop to the range support at $6,300.
Bitcoin drew support from the Tether selloff and the news that Fidelity has launched an institutional platform for Bitcoin and Ethereum. This could potentially sustain strong gains for this cryptocurrency on an influx of funds, volumes, and activity. Still, some uncertainty remains while the SEC mulls its decision on Bitcoin ETF applications.
In fact, it seems that this digital asset is starting to break above the top of the flag to signal that bulls are ready to charge again. Note that risk appetite has been present in the general financial markets in earlier sessions, so investors might be able to sustain their appetite for higher-yielding assets and cryptocurrencies.
Images courtesy of TradingView.