Bitcoin spiked past the resistance of its symmetrical triangle formation, but price has fallen back below the top just as quickly. This signals hesitation among buyers or a brief pullback to gather more bullish momentum.
The 100 SMA is slightly above the longer-term 200 SMA to suggest that the path of least resistance is to the upside or that the move higher might be sustained. However, these indicators might not yet be conclusive since the moving averages are oscillating to signal consolidation action.
Price has also retreated back below moving averages to indicate that selling pressure remains present. In that case, bitcoin could still fall to the bottom of the triangle at $6,200 to test support. Stochastic is also heading south to suggest that bearish momentum is in play and might even be enough to spur a break of support. RSI, on the other hand, is heading north to signal the presence of bullish pressure and possibly further gains.
Note that the chart pattern spans around $6,000 to $10,000 so the resulting rally could be of the same height. Similarly a move below support could spur a selloff that’s the same height as the triangle.
News that Tether sold off led to a corresponding rally in bitcoin, as the former is often being used to buy digital currencies. Tether is a stablecoin tied to the value of the US dollar and the sharp drop led to a moment of market panic that sent traders scurrying to bitcoin.
Apart from that, reports that Fidelity has launched an institutional platform for bitcoin and ethereum is also positive for cryptocurrencies and an update that might actually be enough to sustain recent rallies. After all, a surge in institutional money could mean more activity and stronger volumes for bitcoin and its peers, attracting even more investment from retail and institutional investors alike.
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