Bitcoin has recently formed higher lows and higher highs to trade inside an ascending channel on its 1-hour chart. Price is currently testing support and might be due for a bounce back to the top.
The 100 SMA is above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. In other words, the uptrend is more likely to resume than to reverse. However, bitcoin has dipped below the 200 SMA dynamic inflection point so there may be a bit of selling pressure coming back in.
Stochastic is pointing down to show that sellers have the upper hand. RSI is also moving south so bitcoin might follow suit. However, both oscillators are also nearing oversold levels to signal exhaustion among sellers, so turning higher could bring buyers back in.
A bounce could lead to a test of the mid-channel area of interest around $6,700 or a move to the channel top around $6,900. On the other hand,a break below this $6,450 area could mean a continuation of the slide for bitcoin.
Bitcoin drew some support late last week on the SEC decision to prolong the comment period for the VanEck/SolidX proposed rule change instead of issuing a rejection. This keeps the hope alive that an approval may be in order sooner or later, also for the other bitcoin ETF applications pending.
If so, bitcoin could embark on the much-anticipated rebound before the end of the year as institutional and retail funds flow in. Keep in mind that bitcoin has also been drawing support from updates suggesting that more financial institutions are delving into the cryptocurrency industry.
So far, there have been no major updates from the sector apart from the anticipation for bitcoin ETF rulings. It has been reported, though, that the Winklevoss twins are turning their attention to Europe as a larger market for their crypto products.
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