Bitcoin was previously consolidating inside a descending triangle pattern but is starting to break past the resistance. This suggests that a long-term uptrend may be in order, possibly lasting by the same height as the chart formation, which spans $6,100 to $8,400.
The 100 SMA is still below the longer-term 200 SMA to signal that the path of least resistance is to the downside. In other words, the selloff is still more likely to resume than to reverse. Price is breaking past the 200 SMA dynamic inflection point, though, so a pickup in buying pressure might be seen, especially if price breaks past the channel top at $6,900.
Stochastic is heading higher so bitcoin might follow suit while buyers have the upper hand. However, this oscillator is approaching overbought territory to reflect buying exhaustion and a possible return in selling pressure. RSI has a bit more room to climb before hitting overbought levels, so buyers could stay in control for much longer.
Bitcoin has drawn support from a couple of positive updates this week, including Google’s plans to lift its ban on bitcoin and ICO ads by next month and Bitmain’s IPO. Google will only be approving ads from regulated entities to target audiences in the US and Japan, though. Meanwhile, Bitmain’s financial statements impressed investors who likely revived bullish bets in the industry. ICE is also said to be launching its bitcoin futures contracts on EUR, USD and GBP, bringing even more volumes to the mix.
For some, this could be enough to start the much-anticipated rebound before the end of the year, even as the SEC hasn’t made its ruling on bitcoin ETF applications just yet. Recall that the regulator simply prolonged the comment period to get more input for the public and more time to make its decision.