Bitcoin has been trending higher in an ascending channel seen on its 1-hour time frame and bounced off the top. This suggests that a pullback to support may be in order, and the Fibonacci retracement tool shows more potential support zones where buyers might be waiting.
The 50% level seems to line up with the channel bottom around the $6,480 area and it also coincides with an area of interest or former resistance turned support level. If it is enough to keep losses at bay, Bitcoin could bounce to the channel resistance near $6,600 or at least until the mid-channel area of interest at $6,550.
The 100 SMA is above the longer-term 200 SMA to confirm that the path of least resistance is to the upside or that the rally is more likely to resume than to reverse. In addition, the 100 SMA dynamic inflection point lines up with the 50% level and the 200 SMA lines up with the 61.8% Fib, which might be the line in the sand for this uptrend.
Stochastic is still pointing down to indicate that sellers have the upper hand, but exhaustion could be seen soon as the oscillator approaches oversold territory. Turning higher could lead to a bounce if buyers are able to regain control. RSI has more room to head south so Bitcoin could keep following suit and see a larger correction.
Bitcoin has drawn support mostly from a more positive outlook in Morgan Stanley’s report and also remarks from Overstock’s CEO. Patrick Byrne told crypto YouTube vlogger Naomi Brockwell:
People turn to it where they collapse, like Venezuela or Cyprus or Syria, something like that. So yes, given that I think the entire modern financial system is a big Keynesian, magic money tree Ponzi scheme, I do expect that the day will come when people turn to crypto.
Apart from that, expectations for the ICE Bakkt Bitcoin futures, the SEC decision on Bitcoin ETF applications, and the launch of Fidelity’s institutional platform are also keeping Bitcoin afloat.
Images courtesy of TradingView
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