Bitcoin recently broke above its long-term descending trend line on the 1-hour time frame to signal that a reversal from the slide is in the works. The price is in the middle of a pullback after its recent breakout, and bulls might return right here.
The 100 SMA crossed below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the selloff is more likely to gain traction from here. The price is also trading below both moving averages so these could hold as dynamic resistance moving forward.
However, bitcoin is also finding support at the 61.8% Fibonacci retracement level that lines up with the $9,955 mark. A bounce off this level could take price back up to the swing high at $10,950 or higher.
Stochastic is turning higher without even reaching the oversold region, indicating that bullish momentum is picking up. RSI is also heading up to show that buyers are regaining the upper hand.
BTC/USD Chart – TradingView
Bouncing off the 61.8% Fib could complete an inverse head and shoulders pattern on the 1-hour time frame, adding more confirmation that a rally is underway. This chart pattern would span $9,342 to around $11,000 so the resulting rally past the neckline could be roughly the same height.
Of course, it would still take a significant market catalyst to spur a rally for bitcoin as traders seem disappointed over the lack of momentum these days. Still, fundamentals are looking solid, particularly when it comes to the record hashrate that secures the network and transactions on the blockchain.
The network hashrate hit an all-time high of just under 95 exahashes per second, which also means that the estimated cost to keep it running is around half a million dollars per hour. With that, traders are keen to find out how the halving of mining rewards next year could impact prices.
Images courtesy of TradingView
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