Bitcoin has bounced off the bottom of its ascending channel on the 1-hour chart and is aiming for the next upside targets. Applying the Fib extension tool shows where these might be.
The price is currently testing the 38.2% extension and might still aim for the mid-channel area of interest around the 50% extension and $6,700 mark. Stronger bullish pressure could take it up to the 61.8% level or the 78.6% extension at the swing high past $6,800. The full extension lines up with the channel top around $6,900.
The 100 SMA is above the longer-term 200 SMA for now so the path of least resistance is to the upside. However, the gap between the moving averages has narrowed to signal a likely bearish crossover and return in selling pressure. Then again, the moving averages could simply be oscillating to reflect range-bound conditions.
Stochastic is pointing up to indicate that bullish momentum is in play, but the oscillator is nearing overbought levels to signal exhaustion. Turning back down could mean a return in selling pressure and another dip to the channel support. Similarly, RSI is on the move up, so the Bitcoin price might follow suit, but bullish energy could fade as it nears overbought levels.
Bitcoin has a few good factors supporting further upside as CFTC’s Giancarlo affirmed that cryptocurrencies might be here to stay and that he sees a future in them. This positive sentiment was echoed by Twitter’s Dorsey who said that these could be useful for countries that are still struggling to rely on their own currencies.
This follows Google‘s announcement to reverse its Bitcoin and ICO ad ban this month, likely reviving general public interest even as it only approves ads from regulated entities. This still represents a thumbs-up for regulatory efforts in the US and Japan as the search engine will allow ads to target audiences in these countries.
Images courtesy of TradingView