Bitcoin looks prime for an uptrend as it forms a double bottom visible on its 1-hour chart. Price has yet to break past the neckline at the $6,650 area to confirm a potential rally.
This chart pattern is around $200 tall so the resulting rally could be of at least the same height. However, the 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside or that the selloff is more likely to resume than to reverse. Then again, price has busted through the 100 SMA dynamic inflection point to reflect bullish momentum and might be ready to move past the 200 SMA also.
The gap between the moving averages is narrowing to signal slowing bearish pressure and a possible upward crossover. In that case, bulls could sustain their rally, possibly even past the $200 target.
Stochastic is also pointing up to signal that buyers are in control and could have plenty of room to cover before overbought conditions are seen. RSI is also heading north so bitcoin price could keep following suit, but the oscillator is nearing overbought levels to reflect exhaustion.
Traders simply appear to be waiting for more catalysts to sustain the earlier climb, but there is some degree of uncertainty as risk aversion grips financial markets. Then again, bitcoin bulls have a lot to look forward to, including the launch of ICE Bakkt bitcoin futures and the institutional platform for bitcoin and ethereum by Fidelity.
Some hesitation might also be stemming from regulatory concerns, particularly when it comes to the SEC decision on bitcoin ETF futures. The comment period is still going on and rejection could lead to a setback for the industry. Approval, on the other hand, could provide a stronger kick higher.