Bitcoin seems to be pulling up from its recent dive as it tests the bottom of a falling wedge on its daily time frame. Applying the Fibonacci retracement tool shows the next potential resistance levels.
The 61.8% level seems closest to the wedge resistance around the $9,756 level and the 100 SMA dynamic inflection point. The 50% Fib is closer to the former support around $9,500 while the 38.2% level is near the $9,000 mark.
The 100 SMA is above the 200 SMA for now, which suggests that the path of least resistance is to the upside or that support is more likely to hold than to break. However, the gap between the two is narrowing to reflect weakening bullish momentum.
RSI is turning up from the oversold region, indicating that buyers are ready to take over while sellers take a break. Stochastic is also starting to pull up after hanging around the oversold region for quite some time.
BTC/USD Chart – TradingView
Bitcoin recently tumbled on the lackluster reception of Bakkt bitcoin futures, but the selloff doesn’t seem to be as bad as the reaction to the CME and CBOE launch. Still, a lot of traders had been banking on a rally from it, so it’s no surprise that strong liquidation followed.
There are still plenty of fundamental factors that could keep bitcoin supported in the longer-run, including the rising hash rate or mining power of the network and the upcoming halving in early next year. Of course, a lot of traders are already positioning for the latter, which could keep the impact of the event subdued. Besides, it did take months or even years for bitcoin price to double as a reaction to halving of mining rewards.
On a macro perspective, easing central bank biases could also contribute to bitcoin price gains as traders typically seek higher returns in alternative investments in these cases.
Images courtesy of TradingView
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