BY SRnetworker
Bitcoin Price Key Highlights
Bitcoin price bounced after forming a bullish divergence on its 1-hour time frame.
Price could make another test of the longer-term channel resistance to attempt an upside break.
However, bitcoin has to contend with Fib retracement levels and dynamic inflection points nearby.
Bitcoin could have another shot at a downtrend reversal if it’s able to break past the nearby inflection points.
Technical Indicators Signals
The 100 SMA is still below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the downtrend is more likely to resume than to reverse.
However, bitcoin price has moved slightly past the 100 SMA dynamic inflection point as an early signal of a pickup in bullish momentum. Price could test the 200 SMA resistance next and this lines up with the top of the channel on the 4-hour time frame, as well as the 61.8% Fibonacci retracement level.
RSI came off a bullish divergence as price made lower lows while the oscillator had higher lows. However, RSI appears to be turning lower without hitting overbought levels to hint that sellers are eager to return. Stochastic is also on the move down to indicate a pickup in selling pressure.
In that case, bitcoin could still find itself resuming the selloff back to the mid-channel area of interest or support at $5,400. A break past the $6,500 area, on the other hand, could mark the start of a reversal.
Some speculate that the bounce was merely due to a release of 250 million Tether, a stablecoin that was seen to be responsible for influencing bitcoin price back in 2017. Still, it’s worth noting that Japan is stepping up the game in terms of overseeing bitcoin exchanges so there could be reason for investors to stay cautious.