Bitcoin (BTCUSD) Technical Analysis: Ready for a Bounce to These Targets?

Bitcoin has tumbled back down to the bottom of its ascending channel after previously consolidating close to the top. Price appears to be finding support at this channel bottom, and a bounce could take it up to the upside targets marked by the Fibonacci extension tool.

The 38.2% level is just above the mid-channel area of interest, which may contain some take-profit points for buyers. The 50% extension lines up with the swing high around $6,800 and the 61.8% level lines up with the top of the channel at $6,900.

The 78.6% extension lines up with the $7,000 major psychological mark which usually prompts some profit-taking. Stronger bullish momentum could take bitcoin up to the full extension at $7,167.

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, the uptrend is more likely to resume than to reverse. In addition, the gap between the moving averages is widening to reflect stronger bullish momentum.

Stochastic is heading lower to reflect the presence of selling pressure, though. Then again, this oscillator is nearing oversold levels to signal exhaustion, and turning higher could bring buyers back in. Similarly RSI is already dipping into oversold territory and may be turning up to signal a return in bullish momentum.

A break below the channel support around these $6,400 levels could indicate a continuation of the earlier slide and a possible drop back to the longer-term floor at $5,800.

Bitcoin has drawn support from the SEC decision to open the comment period for the proposed rule change on listing the VanEck/SolidX bitcoin ETF on an exchange. This has given investors hope that an approval may be possible sooner or later, likely drawing stronger inflows from institutions and retail investors. Rejection, on the other hand, could mean more dips for bitcoin.

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