Bitcoin has formed higher lows and higher highs to trade inside an ascending channel visible on its 4-hour chart. Price has dropped back to test support, and bulls are still defending this area for now.
A stronger bounce could take bitcoin to the top of the channel around the $7,000 major psychological mark or at least until the middle at $6,700. However, the 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside or that support is more likely to break than to hold.
At the same time, stochastic looks ready to turn south without even reaching overbought territory, suggesting that sellers are eager to return. RSI, on the other hand, has a lot of ground to cover before indicating overbought conditions so buyers could still stay in control.
In that case, a candle closing above the 200 SMA dynamic inflection point could confirm that bulls are winning out and could allow the uptrend to carry on. After all, buyers continue to keep defending support zones to signal that there are several factors keeping investors optimistic.
For one, there’s the anticipation for stronger institutional flows coming in as Fidelity’s platform becomes more widely accessible early next year. Many analysts support bullish views, with some even projecting that this could buoy bitcoin to $33,000 at some point.
Still, there is a lot of uncertainty keeping traders on edge, one of which is the SEC decision on bitcoin ETF applications from VanEck/SolidX. Rejection could mean another leg lower but might offer buyers opportunities to get in at much better levels. Approval, on the other hand, could usher in the much awaited rebound in bitcoin before the end of the year.
Some also point to geopolitical risks in Europe and the US stock market slump as factors that are renewing investors’ appetite for cryptocurrencies as an alternative asset class.