Bitcoin continues to gain traction on its bounce as it starts to form an ascending channel on its short-term time frames. Price is testing the resistance and might be due for a pullback to support.
Applying the Fib tool on the latest bounce shows that the 50% level lines up with the channel bottom which might keep losses in check. If so, Bitcoin could bounce back to the resistance and carry on with its uptrend.
However, the 100 SMA is below the longer-term 200 SMA on this 4-hour chart to signal that the path of least resistance is still to the downside. The gap between the two is still widening to reflect stronger selling pressure. Then again, Bitcoin has climbed slightly back above the 100 SMA as an early bullish signal.
RSI is heading lower to signal that bearish pressure is returning while buyers take a break. This could keep the correction going for a bit longer, and sustained selling pressure could lead to a break of the Fibs and channel bottom. Stochastic is also in the overbought zone and is slowly turning lower to also signal a return in selling momentum.
Bitcoin has drawn support from the renewed focus on institutional investments, as many were relieved to find out that big companies are pushing through with their crypto plans despite the bear market. For one, Nasdaq is gearing up to launch Bitcoin futures early next year as it works with VanEck to consolidate prices over multiple exchanges and aims to get CFTC approval as well.
Meanwhile, Coinbase has reportedly launched an OTC platform for institutions to directly trade cryptocurrency between each other. This could support volumes and activity in the long run, which might keep prices afloat as well. These seemed enough to overshadow news on the SEC Bitcoin ETF stance, so continued developments in this regard could keep bitcoin’s recovery going.
Images courtesy of TradingView
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