Bitcoin (BTC) Price Analysis: Approaching Triangle Support
Bitcoin is forming a descending triangle and getting ready to test the support.
Bitcoin has formed lower highs and is gearing up for another test of support at the $5,800 area, possibly ready to form a descending triangle. A bounce could lead to a test of the resistance, this time around the $6,400 area.
The 100 SMA is still above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, support is more likely to hold than to to break. However, bitcoin has fallen below these levels to indicate that selling pressure is picking up.
RSI has climbed out of the oversold region to signal a return in bullish momentum while stochastic is already on the move up to show that buyers are regaining control. Once both oscillators hit overbought levels and turn down, though, bearish pressure could return and lead to a break of support.
Note that the triangle chart pattern spans around $6,000 to $10,000, which is $4,000 in height. A break of support could lead to a drop of the same size and a rally past the triangle top could also spur a rally that’s the same height.
On Sunday, the SEC issued an order seeking to suspend the trading of the Bitcoin Tracker One and Ether Tracker One exchange-traded notes, issued by XBT Provider AB, which is a subsidiary of CoinShares Holdings. This suspension is to begin at 5:30 p.m. EDT on September 9, 2018, through 11:59 p.m. EDT on September 20, 2018.
According to the regulator in its official order, there is “confusion amongst market participants” on the nature of the financial instruments and the suspension was in “the public interest” to ensure the “protection of investors.”
This has once again dampened hopes that the regulator could rule in favor of bitcoin ETF applications pending a decision later this month, likely delaying any anticipated rebound for the year.