Bitcoin is creating a new ascending channel on its 1-hour time frame as it formed higher lows and higher highs since last week. Price is bouncing off support and may be aiming for the upside targets marked by the Fibonacci extension tool.
Price is already testing the 50% level at the mid-channel area of interest and if this keeps gains in check, another move to the channel bottom could be seen. Sustained bullish momentum could take bitcoin up to the 61.8% level near the $3,700 mark or the full extension at $3,847 that’s just past the channel top.
The 100 SMA is below the longer-term 200 SMA, though, so the path of least resistance is to the downside. In other words, resistance is more likely to hold than to break or the downtrend is more likely to resume. Then again, the gap between the moving averages is narrowing to signal weakening selling pressure. A bullish crossover could draw more buyers in and even pave the way for a break past the channel resistance.
RSI is heading south after recently hitting the overbought zone, though, indicating that sellers are returning while buyers take a break. Stochastic is also moving lower so bitcoin could follow suit while bears have the upper hand. This oscillator is closing in on the oversold region, which suggests that sellers might start to feel exhausted soon.
Bitcoin bull Mike Novogratz insists that bitcoin won’t fall to the $80 level despite signs that the bear market could persist. In an interview with Bloomberg, he reiterated that bitcoin will become digital gold and that revolutions don’t happen overnight.
Meanwhile, Forbes analyst Clem Chambers shared a less upbeat view, warning that bitcoin could still fall to $2,500 in due time. He concluded:
“The end of this crash will look awful, the ends of crashes always do. That is yet to come but the next leg could be here.”