Bitcoin was recently rejected on the long-term descending triangle top and has since formed a small symmetrical triangle at the bottom. Price has just closed past this consolidation pattern’s resistance to indicate that buyers are returning.
In that case, bitcoin could revisit the triangle top around $7,000 or perhaps even attempt to break higher. The 100 SMA is above the longer-term 200 SMA, after all, so the path of least resistance is to the upside. In other words, the climb is more likely to resume from here.
RSI is still heading up and has room to rise before hitting overbought levels. This suggests that buyers could stay in the game for a bit longer before experiencing exhaustion and allowing sellers to take over. Similarly stochastic is pointing up to show that buyers have the upper hand and could push for more gains before overbought conditions are seen.
Risk appetite appears to have returned to general financial markets on account of progress in trade talks, particularly on news that the US is inviting Chinese officials for another round of negotiations. Bitcoin was also expanding its market dominance in the middle of the cryptocurrency selloff, which also helps it stay supported in further dips.
With that, it is also one of the first to take advantage of any moves higher. Besides, bulls have strongly defended the $5,800 to $6,000 support region so far this year so there were likely plenty of buy orders in the region. Still, a strong positive catalyst might be needed in order to sustain any rallies.
Traders might be holding out hope for the SEC ruling on bitcoin ETF applications, although optimism has been dimmed by the regulator’s decision to suspend trading on a couple of crypto-based securities. The SEC pointed to confusion on the related markets and reiterated its mandate to protect consumers.