Recently, Bitcoin moved passed the descending trendline signalling a reversal on the way. The price consolidated within an upward wedge formation but it may break down soon. If an upside break occurs, the price may climb up. However, if it breaks lower then it may pullback.
BTC is showing signs of a reversal from the downtrend but it has still not been able to break out of the rising wedge.
Bitcoin Technical Indicators
The 200 SMA is now below the 100 SMA indicating that the least resistance is upside. What this means is that the moving averages might serve as a dynamic inflection point if a pullback occurs, and, the reversal will be sustained from this point.
Over the past few trading sessions, Bitcoin has created higher lows and higher highs consolidating within the wedge pattern. The price is preparing to test a new support. If it breaks below this level, there might be a fall similar to the fall from the last wave. However, if it moves past this resistance, an upside correction rally will be on the way.
The relative strength index is going lower indicating that the sellers are gaining control of the market. The bears have an upper hand and may be able to retest the broken trendline resistance. More buyers could be drawn in if it holds as support. This will subsequently lead to a long climb.
Why is There an Upside Move?
The political issues in Italy have led to a rise in the risk-taking capacity of investors. This has contributed to the upside break in price. The weakening of the dollar caused by trade war concerns has also contributed to sustaining the upward move.
So far, there hasn’t been any major reports from the United States economy but the data from NFP shows that the currency shrugged off upbeat. This signals that the appetite of investors for the USD is weak and cryptocurrencies like Bitcoin have become more appealing.