Bitcoin Price Watch: Eyes on This Classic Reversal Pattern
Bitcoin Price Key Highlights
- Bitcoin price could pause from its drop as a double bottom formation can be seen on the 1-hour chart.
- Price has quite a way to go before testing the neckline at $8,800.
- An upside break could lead to an uptrend of the same height as the double bottom formation.
Bitcoin price formed a double bottom pattern on its 1-hour time frame and needs to break past the neckline to confirm the climb.
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 means that the downtrend is more likely to resume than to reverse. In addition, the 200 SMA lines up with the pattern’s neckline to add to its strength as a ceiling. If it holds, another bottom could be formed.
RSI is on the move up to indicate that buyers have enough energy to push for more gains, but the oscillator is also nearing overbought levels to reflect exhaustion. Stochastic is also heading north but could be due to turn back down form overbought levels soon, so bitcoin price might follow suit.
Investors continue to hold out for positive updates in the industry but until those come out, caution has prevailed after bitcoin price was rejected at one resistance level after another. Traders are also keeping close tabs on the investigation into South Korea’s largest crypto exchange as this revives issues on regulation and security.
In contrast, the dollar has been firmly supported by stronger rate hike hopes, particularly for the Fed meeting in June. Although some data points have fallen short of estimates, traders are paying closer attention to positive figures on inflation and shrugging off downbeat remarks from FOMC members.
Looking ahead, it could be all about market sentiment from here as a week without industry developments could draw more sellers in.
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