Bitcoin is still trading inside its descending triangle on the 4-hour time frame and consolidating just below resistance. A break past the $6,500 resistance could be enough to confirm that bulls have won over and that a longer-term uptrend is underway.
However, 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, resistance is more likely to hold than to break. The 200 SMA is also just above the triangle top to add to its strength as a ceiling. If it keeps gains in check, price could fall back to the triangle bottom around $6,150.
Stochastic looks ready to turn higher without hitting the oversold region, indicating that buyers are eager to return. RSI is turning lower to signal that bears still have the upper hand and could continue to push Bitcoin south. A break below support could spur a drop that’s the same height as the long-term triangle pattern.
Warnings that another Bitcoin bubble may be just around the corner could be discouraging bulls from charging, even with a handful of positive updates that would likely keep price supported. CEO of Civic Vinny Lingham says:
“Do I think we’ll have another bubble? Probably, because people just don’t learn. Once it broke through $20k, it would run to over $100k and then we have the start of a new bubble-bust cycle.”
On more positive news, the launch of Bitcoin futures on ICE Bakkt is approaching, possibly spurring stronger inflows and more volatility. However, traders are also wary of how the launch of CME Bitcoin futures last year may have spurred the huge drop as it opened the cryptocurrency to short positions. Bakkt could begin offering physically settled Bitcoin futures contracts in December 12.