Bitcoin Price Key Highlights
- Bitcoin price previously broke past a descending trend line to signal that a reversal is underway.
- Price has since consolidated inside a rising wedge formation and could be due for a breakout soon.
- An upside break could set off a steeper climb while a break lower could lead to a pullback to the broken trend line.
Bitcoin is starting to show signs of a reversal from its downtrend but has yet to break out of this rising wedge.
Technical Indicators Signals
The 100 SMA crossed above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. In other words, the reversal is more likely to be sustained from here and the moving averages could hold as dynamic inflection points in the event of a pullback.
Bitcoin price has formed higher lows and higher highs to consolidate inside a rising wedge pattern, with price gearing up for a test of support. A break below this could lead to a drop of the same height as the chart formation while a move past resistance could lead to a steeper rally.
However, RSI is turning lower to indicate a return in selling pressure. Stochastic is also pointing down to signal that bears have the upper hand and could spur a retest of the broken trend line resistance. Holding as support could draw more buyers in and lead to a prolonged climb.
A pickup in risk-taking owing to the resolution of political troubles in Italy was seen to have supported an upside break while dollar weakness on trade war concerns also sustained the move.
There are no major reports due from the US economy this week and it’s worth noting that the currency shrugged off upbeat NFP data. This suggests that appetite for dollars is weak and that there’s a good chance for cryptocurrencies like bitcoin to take advantage.