Bitcoin has formed lower highs and higher lows to create a symmetrical triangle on its 4-hour time frame, with price currently testing support. A bounce off this area could take bitcoin back up to the resistance around $11,500.
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. However, the 100 SMA is turning slightly lower to signal weakening bullish momentum and price is already trading below the 200 SMA dynamic inflection point to reflect bearish pressure.
A break below support around $10,000 could set off a drop that’s around the same height as the triangle pattern, which spans $8,500 to around $13,500. Then again, RSI is already indicating oversold conditions or exhaustion among sellers, so turning higher could signal that bullish pressure is picking up. Stochastic is also in the oversold territory to signal that sellers are exhausted.
BTC/USD Chart – TradingView
Bitcoin has been under weak footing as the US Securities and Exchange Commission once again delayed their decision on ETFs, leading many to worry that regulation could ultimately derail any potential rallies. Recall that authorities turned a stricter eye on cryptocurrencies after Facebook’s Libra announcement spurred a strong rally.
Still, there are reasons to stay long-term bullish on bitcoin, particularly when it comes to the hash rate and the upcoming “halvening” which involves slashing rewards to miners in half, likely doubling the coin’s value. Analysts have gone so far as to predict $100,000 as a target for the following year or the next.
While bitcoin was able to take advantage of risk-off flows from stocks and commodities over the past week, it appears that the cryptocurrency is no longer immune to the bloodbath these days. The $10,000 mark is a make-or-break level that could determine whether or not it could still reach for record highs within the year.
Images courtesy of TradingView
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