Bitcoin (BTC) Price Analysis: Channel Within a Channel
Bitcoin continues to climb inside an ascending channel on its 4-hour time frame and is forming a new rising channel at the upper half. Price keeps bouncing off the mid-channel area of interest and might be due to test this support area again soon.
However, the 100 SMA is below the longer-term 200 SMA on this time frame to suggest that the path of least resistance is to the downside. In other words, bearish momentum could win out and lead to a larger dip to the bottom of the larger channel around $6,500.
Then again, price is trading above both moving averages to signal that bulls are putting up a fight. A dip to the short-term channel bottom could also find support near the 200 SMA dynamic inflection point while the 100 SMA dynamic support lines up with the larger channel bottom. The gap between the moving averages is also narrowing to signal weakening bearish pressure.
RSI looks ready to turn lower from overbought levels to indicate a possible return in bearish momentum while stochastic seems to have a bit more room to climb. Heading back down could draw bitcoin price along with it, but it seems that buyers are holding their ground until the $6,600 support.
Cryptocurrencies were able to pull off a positive week to jumpstart the quarter and new month, which could keep investors optimistic in the days ahead. For many, the recent rallies are more than just profit-taking from earlier declines and not merely a dead-cat bounce.
Traders will now turn to industry developments to gauge if the climb can be sustained, and so far headlines have been supportive of gains. More and more governments are warming up to the idea of using blockchain technology in several applications, also spilling over positive vibes for the entire industry.
There are no major catalysts due for the US dollar apart from the US CPI later in the week, so it could continue to be about market sentiment from here.