Bitcoin appears to be finding support at the area of interest around $6,600 and might be ready to resume the climb. The Fib extension tool shows the next potential upside targets from here.
The 78.6% level lines up with the swing high around $7,800 and might be an ideal take-profit point for short-term buyers. A quick bounce might already find resistance at the 38.2% Fib around $7,200 while stronger bullish pressure could take bitcoin up to the full extension at $8,157.
The 100 SMA is crossing above the longer-term 200 SMA to indicate that the path of least resistance is to the upside or that the climb is more likely to resume than to reverse. These moving averages also line up with the area of interest to add to its strength as a floor.
However, stochastic is turning lower after briefly touching the overbought zone, indicating that sellers are eager to return and push bitcoin back down. In that case, a break below the $6,550 area might be enough to spur a drop to the longer-term floor closer to $6,000. RSI also seems to be on the move south but is currently treading sideways to reflect consolidation.
Bitcoin seems to be having trouble sustaining its strong rally as traders must be waiting for bigger headlines to lead to more gains. However, it’s worth noting that there’s a lot of support in play, particularly as Fidelity unveiled its institutional platform for bitcoin and ethereum investors.
Not only would this bring strong volumes and activity, but the pickup in demand would likely spur price gains as well. Retail traders would likely not want to be left out of these moves, so there may be early positioning before the end of the year and when the platform becomes more readily available in Q1 or Q2 next year.
Of course there is some degree of uncertainty when it comes to regulatory action, especially since the SEC has yet to make its decision on bitcoin ETF applications.