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Bitcoin Price Key Highlights
- Bitcoin price broke to the upside of its short-term consolidation pattern to signal bullish pressure.
- Price has yet to bust through several upside hurdles to confirm that buyers are in control.
- Technical indicators are mostly suggesting that the drop could still resume.
Bitcoin price made a short-term upside break but still faces several upside hurdles before sustaining the rally.
Technical Indicators Signals
The 100 SMA is still below the longer-term 200 SMA to signal that the path of least resistance is to the downside. This means that there’s a good chance the selloff could still resume. This short-term moving average is also near the top of the channel to add to its strength as a ceiling.
Applying the Fibonacci retracement tool shows the next potential resistance levels where sellers could hop in. Price is currently testing the 38.2% retracement but might still pull up to the 50% level closer to the trend line resistance. The $7,000 major psychological level could also keep gains in check.
RSI is on the move up but nearing overbought territory to reflect exhaustion among buyers. Allowing sellers to regain the upper hand could lead bitcoin price to revisit the swing low or the channel bottom closer to $6,000.
Stochastic is still pointing up, though, so there may be some bullish energy left. If buyers are strong enough to push past the channel top, a test of the 200 SMA dynamic inflection point could take place next. From there, the swing high around $7,500 could be the next resistance.
Bitcoin price got a strong boost from news that New York’s Financial Services Authority gave a license to Square’s Cash mobile app. This allows its clients to trade bitcoin in the state, and the app reportedly has 7 million active users as of its first quarter earnings call.