Bitcoin is finding buyers at the long-term support that’s held so far this year. A bounce could take it back to the top of the descending triangle pattern visible on the daily time frame while a breakdown could mean that more losses are in the cards.
The 100 SMA is still below the longer-term 200 SMA on the daily chart to confirm that the path of least resistance is to the downside. This means that support is more likely to break than to hold. Then again, the gap between the two is narrowing to signal weakening bearish momentum.
RSI is also indicating oversold conditions, which suggests that sellers could take a break and allow buyers to take over. Stochastic has also made its way to the oversold region and could be due to turn higher soon, confirming a return in bullish pressure. A bit of bullish divergence can be seen as bitcoin made higher lows since June while stochastic had lower lows.
Bitcoin is up 4.05% over the past 24 hours according to CoinMarketCap, although some dismiss this as a short squeeze or dead-cat bounce on some profit-taking activity. After all, the digital asset has been sliding for the most part of the week so it’s understandable that traders are booking positions before the end of the week.
Others say that the spotlight is returning to a few positive developments, namely the reopening of South Korea’s Bithumb to withdrawals and deposits, as well as the clearing of charges for UPBit after the recent investigation. Goldman Sachs is also reportedly considering custody offering for crypto funds, which would protect both their clients and themselves in case they do offer crypto-related products.
Bitcoin could still use stronger support from another round of good updates in order to regain its footing since there are still a handful that claim it’s far from bottoming out.
Images courtesy of TradingView
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