Bitcoin (BTC) Price Analysis: Waiting for a Wedge Breakout
Bitcoin has formed lower highs and lower lows to consolidate in a falling wedge pattern. Price is attempting to break higher as it hovers close to the top of the formation.
However, the 100 SMA is still below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. This means that the selloff is more likely to continue than to reverse or that resistance is more likely to hold than to break.
Also, the gap between the moving averages is widening to reflect stronger bearish momentum. The 100 SMA is just above the wedge resistance, adding another ceiling in the event of an upside break from $6,200.
RSI is heading higher, though, so buyers might still have enough energy to push for more gains. Stochastic has more room to climb so the rally could be sustained.
News that the SEC is looking into another bitcoin ETF appears to be propping up demand for now, along with a slight pickup in risk-taking on account of cooling trade tensions earlier in the week.
As it turns out, the financial regulator is seeking comments on a proposal by the Cboe to list and trade the SolidX Bitcoin Shares. This ETF was proposed by the VanEck SolidX Bitcoin Trust and is the result of the investment firm’s partnership with blockchain startup SolidX.
Meanwhile, CoinMarketCap’s Dominance Index revealed that bitcoin’s share of the cryptocurrency market hit a 2.5-month high today. This signals that investors are flocking back to alternative assets while global stocks take hits on trade war fears.
Such was the case on resurfacing Greek debt troubles a few years back, as investors seek higher returns but are reluctant to place funds on weakening stocks or commodities.