Bitcoin might be ready to pull up from its slide as price formed an inverse head and shoulders pattern on its short-term time frame. Price has yet to break past the neckline around $6,300 to confirm that a rally is underway.
The 100 SMA has crossed above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. In other words, there’s a good chance that a bullish run could gain traction from here. The 100 SMA is holding as dynamic support also.
RSI is on the move up on this time frame, also supporting the idea of further bullish momentum. Similarly stochastic is moving north so bitcoin could follow suit while buyers have the upper hand. However, the oscillator is nearing overbought conditions to signal potential exhaustion soon.
Bitcoin appears to be taking advantage of dollar weakness stemming from trade tensions these days as this typically results to a weaker performance in the stock market. Traders also anticipate repercussions on the US economy as its trade partners retaliate with countermeasures, which explains why the dollar barely gains from safe-haven flows.
Meanwhile, there’s still plenty of uncertainty in the crytocurrency particularly when it comes to security incidents and regulation. Late last week, Japan’s financial regulators reportedly stepped up their oversight on exchanges with a list of restrictions. Some exchanges like bitFlyer suspended trading in order to comply with these requirements pertaining to money laundering and terrorist financing.
Some are pointing to the latest release of 250 million Tether as the possible reason for the bitcoin bounce as this stablecoin was allegedly used to manipulate the cryptocurrency’s price back in 2017. In any case, further developments on the trade front and industry updates, particularly those that relate to regulation, could determine if bitcoin could sustain its climb.