Bitcoin Price Key Highlights
- Bitcoin price has broken past its inverse head and shoulders pattern neckline to show that an uptrend is in the cards.
- Price is hitting another upside barrier at its descending trend line, though, and this might prompt profit-taking.
- Technical indicators are also suggesting that the rally is overdone.
Bitcoin price is testing the descending trend line on its 4-hour time frame, and moving past this hurdle could mean more gains.
Technical Indicators Signals
The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. This suggests that the downtrend is more likely to resume than to reverse.
The 200 SMA also lines up with the descending trend line to add to its strength as resistance. This means that it would take a strong catalyst to trigger and sustain an upside break.
Stochastic is indicating overbought conditions, though, so selling pressure could still pick up. Similarly, RSI is in the overbought region and looks ready to turn lower, so bitcoin price might follow suit.
Market Factors
Bitcoin price has drawn a lot of support from easing regulatory concerns, stemming from the US Senate hearing and remarks from South Korean officials suggesting that they are open to introducing something like BitLicense.
Recall that Commodity Futures Trading Commission Chair Christopher Giancarlo and Securities and Exchange Commission Chair Jay Clayton mentioned that they have no plans on banning bitcoin. Instead they plan on regulating the industry without quashing development.
More positive updates like these could help improve the sentiment in the industry. Apart from that, the continuation of risk-taking in higher-yielding assets like stocks and commodities has also benefitted bitcoin.
Besides, the move all the way to the $10,000 area of interest could bring more buying interest as this could signal an end of the correction. A sustained move past the next $12,000 area of interest could confirm that buying momentum is in play, attracting even more buyers.