Bitcoin Price Key Highlights
- Bitcoin price recently broke above a short-term descending trend line as an early reversal signal.
- Price reached the $6,650 level then made a pullback to the broken resistance, which lines up with the Fibs.
- Technical indicators also suggest a continuation of the reversal.
Bitcoin price broke above its descending trend line and is making a retest of this area before heading further north.
Technical Indicators Signals
The 100 SMA is still below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. This indicates that the selloff is more likely to resume than to reverse. However, the gap between the two is narrowing to indicate that a bullish crossover may be due. Also, the 100 SMA appears to have held as dynamic support just above the broken trend line.
This also coincides with the 50% Fibonacci retracement level on the latest swing low and high. Holding as support could push bitcoin price back up to the swing high or higher. This could also lead to the completion of an inverse head and shoulders, which is a classic reversal signal. This chart pattern would be around $1,000 in height so the resulting rally could be of the same size.
RSI is on the move down, though, so there may still be some selling pressure left. This could lead to a deeper pullback to the 61.8% Fib or even a dip back to the lows. Stochastic is already indicating oversold conditions and could turn higher soon, possibly indicating a return in bullish pressure and a continuation of the reversal.
Bitcoin price encountered another blow when Coinbase CEO Armstrong warned that it may take longer for mass adoption to take place. He explained:
This technology is going through a series of bubbles and corrections, and each time it does that, it’s at a new plateau. People’s expectations are all over the map, but real-world adoption has been going up.