Bitcoin appears to have broken out of its double bottom formation visible on the 1-hour time frame as the price busted through resistance around $8,750. This could set off a climb that’s at least the same height as the chart formation.
The reversal pattern spans $8,250 to $8,750 so the rally might last by $500 or until $9,250. The 100 SMA just crossed above the 200 SMA to indicate that the path of least resistance is to the upside. In other words, the uptrend is more likely to gain traction from here. The price is also trading above both moving averages, so these could hold
A bit of a bullish flag continuation pattern can also be seen, so a move of the same height as the mast could follow. However, RSI is already indicating overbought conditions and turning lower to signal that bearish pressure is about to pick up, possibly leading to a pullback to the broken neckline resistance that lines up with the moving averages’ dynamic inflection points.
Stochastic is also turning lower from the overbought zone to indicate that selling pressure is returning while buyers take a break. Stronger bearish momentum could take the price down to the bottoms at $8,250 or lower.
The Securities Exchange Commission rejected the latest bitcoin ETF proposal but the cryptocurrency still managed to stage a relief rally. The agency noted that the ETF from Bitwise Asset Management and NYSE Arca did not meet standards to prevent fraud and market manipulation.
Its statement indicated:
“NYSE Arca has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and, in particular, the requirement that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices.’”
Images courtesy of TradingView
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