Bitcoin has been on a strong rally recently but could hit a major ceiling as it approaches the top of the falling wedge on the daily time frame. If this still holds as a ceiling, price could resume the drop to support below the latest lows around $5,800.
However, if bulls are stronger this time around, they could push for a strong upside break and a corresponding uptrend of the same height as the chart pattern. This spans around $6,000 to $12,000, so the resulting move could be around $6,000 tall.
The 100 SMA is below the longer-term 200 SMA on this time frame, though, so the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse. Price is starting to climb past the 100 SMA dynamic resistance to signal a pickup in buying pressure, and a move past the 200 SMA could hint that a bullish crossover might follow.
RSI is on the move up but appears to be hesitating on its climb, suggesting weakening bullish pressure. Turning lower could allow sellers to jump back in and lead to another drop to support. Stochastic is already indicating overbought conditions and heading back south, so Bitcoin might follow suit.
Anticipation for the SEC ruling on Bitcoin ETF applications is keeping price supported as the latest from the regulator is an announcement to review their latest rejection. This gives them more time to look into comments and possible revisions that could eliminate concerns on price manipulation and fraud in connected markets.
Meanwhile, there is another Bitcoin ETF application awaiting the SEC’s decision for later in September, and keeping hopes up for an approval might lift Bitcoin prices until then. After all, this would make Bitcoin more accessible for more investors and therefore bring in higher volumes and increased activity.
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