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Bitcoin has exited its descending channel in the 1-hour time frame to signal that an inversion is needed. The price has also exceeded its double minimum to confirm that a bullish trend is underway, but the resistance around the $ 4,400 level has been maintained.
This could mean that a correction of the areas of interest around those former resistance levels could be due. The application of the Fib tool to the latest low and high swing shows that 38.2% to 50% Fibs is close to potential support zones.
In particular, the 38.2% level aligns with the broken SMA 200 dynamic deflection point, while the Fibonon 50% at the $ 4.065 level is in line with the double bottom neckline. The 100 SMA coincides with 61.8% of Fib closer to the resistance of the broken channel.
The 100 SMA is less than 200 longer-term SMAs to confirm that the path of least resistance is downward. In other words, the downward trend is more likely to resume rather than reverse. However, the short-term moving average is changing and the gap between the two is shrinking to suggest a weakening of the sales momentum.
The RSI is still moving south, which means the sellers have the upper hand. The oscillator has a lot of space to lower before indicating oversold conditions, which means downward pressure may persist and the correction could still go deeper. In the same way, the stochastic goes south, so the bitcoin could follow the example until the oversold conditions are met.
If any of the Fibs holds up as support, the bitcoin may bounce up and over. Note that the double bottom goes from $ 3,700 to $ 4,200 so the resulting climb could be at least $ 500 in height.
There are mixed factors that influence bitcoin direction for now, as the SEC president noted that it will take a long time before approving bitcoin ETFs. However, the news that the Nasdaq is carrying out with bitcoin futures and that institutions are carrying out with investments in space have appeared enough to stimulate a change in sentiment.
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