Bitcoin could be due for a rally as it completes a double bottom reversal pattern on its 1-hour chart. Price failed in its last two attempts to break below the $6,500 level and could be ready to test the neckline around $6,650.
A break above this resistance could spur a rally that’s the same height as the chart formation. However, the 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, there’s still a strong chance for the downtrend to resume, especially if Bitcoin finds resistance at the 200 SMA dynamic inflection point near the neckline.
In that case, Bitcoin could still slide back to the bottoms or even break lower. Stochastic is on the move up to suggest that buyers have the upper hand, but the oscillator is nearing the overbought zone to signal that bullish momentum is weakening. Turning back down could bring selling pressure back in the mix. RSI is already in the overbought region to reflect exhaustion among buyers and is starting to move south, so Bitcoin might follow suit.
Traders seem to be looking forward to the release of ICE Bakkt Bitcoin futures later this year as this could bring more volumes and activity for the cryptocurrency. Take note, however, that the CME Bitcoin futures launched last year is being blamed for the drop that ensued then.
The mood appears to be a bit more positive these days, though, as traders are also looking on to the institutional platform for Bitcoin and Ethereum by Fidelity set for greater availability towards Q2 2019. Institutional funds are likely to bring in a larger bulk of inflows, which would likely be bullish for price as more banks and firms could put their money on Bitcoin.
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