Bitcoin recently busted through the near-term resistance at the $6,500 to $6,600 levels to signal that buyers are gaining traction. Price is also moving above an ascending trend line, connecting the highs since the middle of this month.
Price hit resistance around $6,900 on its move higher, suggesting that bulls could use a pullback to gather more energy. Applying the Fibonacci retracement tool on the latest swing low and high shows that the 61.8% level is closest to the trend line and area of interest. This is also near the dynamic inflection points at the moving averages.
Speaking of moving averages, the 100 SMA is above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. This confirms that the uptrend is more likely to resume than to reverse. However, the gap between the two is still pretty narrow, so a bearish crossover could still happen.
Besides, RSI is indicating overbought conditions and looks ready to turn south, signaling a return in selling pressure. Stochastic hasn’t quite reached overbought levels but is also turning lower to indicate a pickup in bearish energy. If this keeps up, Bitcoin price might attempt to break below the trend line and aim for the swing low at the $6,300 short-term support zone.
However, the mood seems to be a bit more positive as traders are turning to the August 23rd deadline of the SEC to make a ruling on the ProShares Bitcoin ETF application. This was filed in December last year, so the regulator can no longer delay their decision.
Many believe that this could be an indication of how their later decision on the other Bitcoin ETF applications shelved for September might turn out. Denial could force Bitcoin to return some of its recent gains while approval could lead to another wave higher.
Images courtesy of TradingView.