Bitcoin formed lower highs and lower lows to consolidate inside a falling wedge on its 1-hour time frame. Ther price broke to the upside to signal that bullish momentum is returning.
However, resistance around $11,500 is holding and the price might be in for a pullback to the nearby support levels marked by the Fib tool. The 50% level lines up with the broken wedge top to add to its strength as support around $10,500.
The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, there’s still a chance that the selloff could resume from here. After all, the 200 SMA is currently holding as dynamic resistance, too.
RSI is in the overbought zone to signal that buying pressure is exhausted and that sellers could take over from here. Stochastic is also in the overbought region to show that buyers might need to take a break and allow bearish pressure to return. BTC/USD Chart – TradingViewBitcoin made quite the correction from its earlier strong rallies as traders booked profits off key levels and likely drew others to do the same once price started sliding. Still, there are plenty of fundamental factors that could keep a lid on declines.
The attention on Facebook’s Libra may have faded after the initial announcement, but it’s likely that market participants are just diversifying out of bitcoin and onto other cryptocurrencies in the market. This suggests that the overall industry interest is still present but that portfolios are just being adjusted.
Apart from that, expectations of increased institutional investment could also lift the industry in general. What could push bitcoin higher, in particular, might be anticipation for the “halvening” in May 2020 that could potentially double its value as mining rewards are cut in half.
Images courtesy of TradingView
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