Bitcoin continues to trade inside its short-term ascending channel but is showing signs of hesitation as it formed a consolidation pattern. Price has formed lower highs and higher lows to create a symmetrical triangle visible on the 1-hour time frame.
Bitcoin is currently testing the top of the triangle and might be due for another move to the bottom, which happens to line up with the support of the rising channel. A break below this area could signal that a downtrend is in order, possibly lasting by at least the same height as the triangle pattern.
The 100 SMA has crossed above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. This suggests that support is more likely to hold than to break or that resistance is more likely to break than to hold. A move past the triangle top around $6,600 could send bitcoin up to the channel top at $6,900 and beyond.
Stochastic is heading north so bitcoin price might follow suit while buyers have the upper hand. However, this oscillator is nearing overbought conditions and might turn back down to indicate a return in selling pressure. RSI is treading sideways to reflect consolidation as bitcoin approaches the peak of the triangle pattern.
Bitcoin has drawn support from updates in the previous week but traders appear to be waiting for even bigger catalysts to sustain a climb. On the longer-term charts, it can be seen that the digital asset is also in triangle or wedge consolidation patterns.
Many remain hopeful that a strong rebound could ensue before the end of the year, and Fundstrat’s Tom Lee predicts that it is still possible. Note that Bakkt will be launching its bitcoin futures soon and institutional money is strongly expected to flow in as price picks up more volumes and momentum.