Bitcoin has formed lower highs and found support at the $9,300 mark to create a descending triangle pattern on its 4-hour time frame. The price just broke through the resistance to signal that an uptrend is in the works.
The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside or that bearish pressure is still in play. Price is closing in on the 200 SMA dynamic inflection point, so this might hold as resistance around the $10,700 mark. A break past this could take bitcoin up to the triangle highs near $12,000.
RSI is already indicating overbought conditions, though, or that the path of least resistance is to the downside. In other words, the price might still head south from here. Stochastic is already in the overbought region to indicate that buyers are exhausted and could be willing to let sellers take over, possibly leading to a pullback to nearby support areas at the triangle top or the 100 SMA dynamic support.
BTC/USD Chart – TradingView
Reports that 85% of the available bitcoin has already been mined seems to have spurred a leg higher for the cryptocurrency as the scarcity could keep its value supported in the long run. This leaves over 3,000,000 Bitcoin left to mine, and the upcoming “halvening” in May 2020 could even result in another boost in value.
Apart from that, the recent Fed interest rate cut seems to have led to a strong rally as well since the central bank seemed open to another easing move before the end of the year. This could hinge on the upcoming jobs report due this Friday as a weak read could spur rate cut hopes and another rally in bitcoin.
On the other hand, a strong read could downplay easing expectations and force a correction, although the path of least resistance seems to the upside.
Images courtesy of TradingView
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