Bitcoin has formed higher lows and higher highs to consolidate inside a rising wedge on its 1-hour time frame. Price is approaching the peak of its formation to signal that a breakout could happen soon.
The 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, support is more likely to hold than to break, especially since the moving averages line up with the bottom of the wedge.
RSI is pointing down, though, so there may still be some selling pressure left. Stochastic also looks ready to turn lower to signal a pickup in selling pressure, even though the indicator hasn’t reached overbought levels yet.
A break below the $6,500 support could lead to a drop that’s the same height as the wedge, which spans $5,800 to $6,800. Similarly a move past the resistance around $6,800 to $7,000 could lead to a rally of the same size.
Bitcoin took some hits earlier on when the SEC denied the application of ETF applications from ProShares and a couple of other companies but resumed the climb when the regulator shared plans to review their decision.
Price could now wait for clues leading up to the ruling on the next set of bitcoin ETF applications due towards the end of September. Indications that an approval is possible could lead to gains for bitcoin price leading up to the announcement, as anticipation is usually stronger in terms of generating bullish bets.
However, bitcoin gains are also hitting a roadblock as Anthony Pompliano, founder and partner at Morgan Creek Digital Assets, suggested that price could dip as low as $3,000. He stated:
“Parabolic increases in price continue to take longer — each parabolic run is measured from the last all-time high to the new all-time high. The first rapid price appreciation took just over 300 days (2010-2011) and the second took over 900 days (2011-2013). The last parabolic price increase peaked at ~$20,000 (2013-2017) and took almost 1,500 days to complete.”