Bitcoin is right at the end of its symmetrical triangle pattern on the long-term charts, signaling that a breakout is bound to happen soon. Technical indicators appear to be hinting at stronger odds of a downside move.
For one, the 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse. The 100 SMA also lines up with the triangle top to add to its strength as dynamic resistance.
Stochastic is heading lower after previously hitting overbought levels, suggesting a return in selling pressure. RSI is still moving sideways to reflect consolidation, barely offering clues on a breakout direction as it is a lagging indicator.
If the price breaks below support around $6,400, it could aim for the $6,200 area of interest next then the triangle lows closer to $6,000. Stronger selling pressure could lead to a downtrend that’s the same height as the chart formation.
On the other hand, bullish momentum taking price past the triangle top at $6,600 could lead to a test of the 200 SMA near the next area of interest at $7,200 next. Stronger bullish pressure could spur an uptrend that’s the same size as the chart pattern, which spans $6,000 to $10,000.
Sentiment in the cryptocurrency appears to be supported by positive remarks in the World Trade Organization report. This highlighted how Bitcoin and its peers could have the potential to disrupt several industries, even as it noted some scalability concerns.
Apart from that, Bitcoin has had one positive development after another, leading more analysts to say that price has already bottomed out. This could set the stage for a rebound until the end of the year, even as there is still some uncertainty on the bitcoin ETF applications pending with the SEC.
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