Bitcoin (BTCUSD) Technical Analysis: Approaching Next Upside Target

Bitcoin is finding more bullish traction on its bounce, possibly setting its sights on the next upside target at the top of the triangle on its 4-hour time frame.

The 100 SMA is above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. In other words, support is more likely to hold than to break and resistance might even be breached. However, the gap between the two has narrowed to reflect weakening bullish momentum. These moving averages might also hold as near-term dynamic resistance also.

RSI is pointing higher to indicate that bullish momentum is in play. However, the oscillator is nearing overbought levels to signal exhaustion among buyers. Turning back down could bring selling pressure in again and lead to another test of support. Stochastic is also heading up so bitcoin could follow suit, but it’s also due to turn from overbought territory soon.

Bitcoin appears to have drawn more support for its midweek bounce on news that Morgan Stanley is looking to offer bitcoin swaps to its clients. This revived focus on institutional interest after it waned when Goldman Sachs was rumored to be ditching its plans to create a bitcoin trading desk.

It also helped that the WEF report projected that digital ledger technologies would add $1 trillion to global trade in the next 10 years. It also estimated that “30% or $1.1 trillion of new trade volume will result due to DLT removing barriers” and that “40% or $0.9 trillion of traditional will move to DLT for better service levels and lower fees.”

Still, there is some wariness among investors when it comes to regulators as the SEC earlier on announced a suspension of a couple of crypto-based instruments, dampening hopes of seeing an approval for the bitcoin ETF applications.

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