Bitcoin appears to be gaining a bit more bullish traction on its bounce and might be headed for the top of its descending triangle from here. Applying the Fibonacci retracement tool shows that the 61.8% level is close to this potential resistance level.
A smaller bounce could hit a ceiling at the 38.2% Fib just slightly above $6,600 and in line with the 200 SMA dynamic inflection point. The 100 SMA is above the longer-term 200 SMA to signal that the path of least resistance is to the upside. In other words, it’s more likely that bulls would gain momentum and take bitcoin higher.
In that case, an upside break past the triangle top closer to $7,000 could be a possibility, sending Bitcoin higher by the same height as the chart formation. RSI is also pointing up to show that buyers have the upper hand, but the oscillator is also nearing overbought levels to hint at exhaustion. Stochastic is moving up to indicate that there’s buying pressure left but could also turn south after hitting overbought conditions soon.
Bitcoin appears to be getting back on its feet, but some dismiss this as a mere profit-taking move on the latest slide. Then again, the $6,000 area has been strongly defended by bulls in the past and they could be repeating this behavior this time.
Nonetheless, traders remain wary of risks, particularly stemming from the SEC ruling on Bitcoin ETF applications. Although their decision to review an earlier rejection and shelve some for a longer comment period led to some gains, more and more doubts about approval are creeping in lately.
For one, the regulator suspended trading in a couple of crypto-based securities, citing confusion among market participants in the related market and emphasizing their mandate to protect consumers. Similar concerns could be raised in relation to the ETFs, which might ultimately lead to another set of rejections.
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