Bitcoin (BTC) Price Analysis: Broadening Wedge Formation

Bitcoin (BTC) Price Analysis: Broadening Wedge Formation 13

Bitcoin is forming lower lows and higher highs to create a broadening wedge formation on the 1-hour time frame. Price recently bounce off support and may carry on to climb to the top.

The 100 SMA is below the longer-term 200 SMA, though, so the path of least resistance may be to the downside. In other words, support is more likely to break than to hold. Then again, the gap between the indicators is narrowing to reflect slowing bearish momentum. For now, the 200 SMA is being tested as dynamic resistance.

RSI is turning lower to signal that selling pressure is in play. This could spur another dip to the wedge bottom around the $3,550 mark or perhaps a breakdown. Stochastic also seems to be topping out as it approaches the overbought zone to signal exhaustion among buyers. Still, a break past the near-term resistance at the $3,650 area could allow the rally to continue.

Bitcoin (BTC) Price Analysis: Broadening Wedge Formation 14

Bitcoin is on slightly better footing so far as it managed to pull up from yet another dip. There is still some degree of optimism keeping traders bullish, but it would help to see actual developments in order to spur stronger volumes.

For JP Morgan analysts, bitcoin might be due to sink even deeper as there are signs that the long-term correction is far from over. This contrasts from other projections that a rebound is already about to happen soon, particularly if institutional investments kick in. There have already been some reports of investments being made and other products being made available to institutions, but buying interest has yet to pick up.

It doesn’t help that risk aversion is in play in general financial markets on account of persistent uncertainties from the US government shutdown and Brexit concerns. With that, traders could be less hungry for risk and more inclined to put money in safe-havens like the dollar versus bitcoin.