Bitcoin has recovered from its intraday slide as it tested the bottom of a newly-forming rising wedge pattern on its 1-hour time frame. This bounce could take it back to the top of the wedge around the $4,300 mark or even on a break higher.
If that happens, Bitcoin could climb by the same height as the chart formation, which spans $3,700 to $4,300. The 100 SMA is above the longer-term 200 SMA to confirm that the path of least resistance is to the upside or that the climb is more likely to resume than to reverse.
Then again, the gap between the moving averages is narrowing to suggest that bullish momentum might slow. For now, the price is able to find support at the 200 SMA dynamic inflection point and could continue to push higher from here.
RSI is also pointing up to indicate that buyers have some energy left. Reaching the overbought zone and turning back down could bring a return in selling momentum. Stochastic is heading higher but dipping into the overbought zone to reflect exhaustion. Turning lower could lead to another dip to the channel support.
Still, it’s worth noting that Bitcoin is drawing support from news that Hong Kong billionaire Li Ka-Shing has invested in the Bakkt platform through his venture capital company. Bakkt is being developed by NYSE owner Intercontinental Exchange in partnership with the likes of Microsoft and Starbucks.
With that, expectations of institutional inflows continue to buoy optimism in the cryptocurrency sector, particularly for Bitcoin which has been making a bit more headway. Whether or not this sentiment is enough to keep price propped up for yet another week or month remains to be seen as traders would like to see more evidence of higher volumes or increased activity in play before sustaining any rallies.
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