Bitcoin was earlier lower than a descending channel, but has just passed resistance to indicate that reversal is needed. The price also closed above the 100 SMA dynamic inflection point as an additional bullish signal.
However, the 100 SMA is still below the 200 long-term SMA to indicate that the path of least resistance is downward. In other words, the downward trend is more likely to resume rather than reverse. The price has yet to test the dynamic drop point of 200 SMA which could also lead to some downward pressure.
RSI has also reached the overbought zone to indicate that buyers are starting to feel exhausted. Similarly stochastic is in the overbought area to signal that buyers might want to take a break. Turning lower could confirm that the sellers are about to take over, perhaps pushing back the bitcoin inside the channel and towards the lows.
However, it is also worth pointing out that both oscillators are pointing upwards for now and have yet to show any inclination towards the south. This suggests that the bulls could continue to load.
In addition, bitcoin is forming a double bottom model with the latest move and could be due to test the neckline at $ 4,200. A break beyond this could stimulate a rally that is the same height as the chart model, which is around $ 400. A higher upward momentum could lead to technical breaks in the next areas of interest, which could attract even more buyers.
The indications that the institutions are carrying out with the cryptic investments, despite the recent decline in the market, are coming to the newswires. The confirmation of some key figures in the sector has also led to the improvement of sentiment that is probably driving the recent moves.
For one, Bloomberg reported:
Nasdaq worked to meet the concerns of the main US swap regulator, the Commodity Futures Trading Commission (CFTC), before launching the contracts.
The New York exchange operator, who was first reported to look at Bitcoin futures last year, wants to allow trading in the first quarter of 2019.