Bitcoin seems to be forming a new wider descending triangle pattern on its 4-hour time frame as it bounced off the $12,500 resistance. The price might be aiming for the triangle support around the $10,600 level from here.
The 100 SMA looks prime for a bullish crossover of the 200 SMA to signal that the path of least resistance is to the upside. In other words, the top of the triangle is more likely to break than to hold, possibly taking bitcoin for a rally that’s around the same height as the chart pattern. The price is also moving above both moving averages so these could hold as dynamic support levels from here.
RSI is heading down to show that selling pressure is in play, which suggests further downside for bitcoin. Similarly stochastic is also moving lower so price might follow suit and test the nearby area of interest at $11,200-11,500.
BTC/USD Chart – TradingView
Bitcoin is still drawing support from risk-off flows in financial markets, likely serving as a higher-yielding alternative investment of sorts during these cases. For one, there’s plenty of geopolitical risks in play, including Brexit and resurfacing trade tensions between the US and China.
The US dollar has also been on the back foot on account of potential retaliatory measures from China, as well as another possible Fed rate cut and political risks from the shootings and the upcoming elections. Elsewhere, the easing cycle among central banks is also dampening traders’ demand for traditional assets like stocks and commodities.
Long-term fundamentals are also looking positive for bitcoin as anticipation for the “halvening” in May 2020 and the fact that a shrinking amount is left to be mined are both propping prices up. Analysts also point to the minting of Tether on the Tron blockchain as another factor that’s been bullish for bitcoin because of the inverse correlation.
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