Bitcoin price was once again rejected on a test of resistance, so it’s now making its way back down to support at $5,800. This might also complete the descending triangle forming on the 4-hour chart.
Support might hold since bulls have been strongly defending this level for the past few months. However, the formation of lower highs is a bit worrisome for buyers. Still, the 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside or that support is more likely to hold than to break.
Also, RSI is turning higher after reaching oversold conditions, signaling that buyers are taking over while sellers take a break. Stochastic is also on the move up to indicate the presence of bullish momentum.
If support holds, Bitcoin could revisit the triangle resistance or even attempt to break higher. A move below support, on the other hand, could spur a selloff that’s the same height as the chart pattern, which spans $5,800 to around $10,000.
Reports that the SEC has decided to suspend the trading of the Bitcoin Tracker One and Ether Tracker One exchange-traded notes issued by XBT Provider AB weighed on sentiment early in the week as this does not bode well for future announcements.
In particular, traders are wary that the regulator would likely reject the remaining Bitcoin ETF applications and might cite the same reasons as this suspension. Their official order stated that the “lack of current, consistent and accurate information concerning Bitcoin Tracker One” led to “confusion amongst market participants regarding these financial instruments.”
Furthermore, the notice reiterated:
The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above quoted company.
Keep in mind that many are hopeful an approval of Bitcoin ETFs could launch the much-anticipated rebound for the cryptocurrency price this year.
Images courtesy of TradingView.