Bitcoin recently broke out of its long-term symmetrical triangle pattern, indicating that a rally is in the works. Zooming in to short-term charts shows that price is also inside an ascending channel and is currently testing the mid-channel area of interest.
Stronger bullish pressure could take price to the top of the channel around the $7,000 level, but it would need to clear this barrier around $6,750 first. A brief pullback to the broken triangle top or the channel bottom around $6,600 to $6,650 could still take place before more buyers join in.
Stochastic is heading lower to indicate that sellers are regaining control and may be eager to hop in as overbought conditions haven’t been shown yet. RSI is just turning south from this area, so bitcoin might follow suit. A break below the $6,600 level could signal that further consolidation could happen.
The 100 SMA is above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. This signals that the uptrend is more likely to resume then to reverse. Also, these moving averages are located close to the potential floor around the broken triangle top and the bottom of the channel, adding to its strength as a floor.
Bitcoin dipped after Coinfloor CEO Obi Nwosu warned that it would be cutting its staff, explaining:
“Coinfloor is currently undergoing a business restructure to focus on our competitive advantages in the marketplace and to best serve our clients. As part of this restructure, we are making some staff changes and redundancies.”
Coinfloor is one of the oldest bitcoin exchanges and is based in London. This business move could mean a dimmer outlook for the market and bitcoin in general, as Nwosu cited that they’ve seen a significant change in trade volume across the market.
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