Bitcoin is establishing its uptrend in an ascending channel after breaking past the previously highlighted reversal pattern’s neckline. This confirms that a longer-term climb may be underway after a quick pullback.
Price is currently hitting resistance at the top of its ascending channel, so profit-taking among buyers may be in the works. At the same time, stochastic is indicating overbought conditions and starting to turn south, so bitcoin might follow suit.
Applying the Fibonacci retracement tool on the latest swing low and high shows that the 50% level lines up with the channel support around $7900-8000. The lowest 78.6% Fib is closer to an area of interest or former resistance at $7200.
The 100 SMA is crossing above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. In other words, the uptrend is just about to gain traction from here. These moving averages are also close to the channel support to add to its strength as a floor.
Continuing with the positive developments in the industry, including recent acquisitions and plans by big hedge funds to invest in the space, it has been reported that a company filed a claim against the Reserve Bank of India to challenge its decision to end dealings with cryptocurrencies.
Sentiment in the industry has considerably improved as risk appetite returned to the financial markets in the previous week. The tendency for bitcoin to end up with strong gains for the second quarter of the year has also drawn more buyers in. The end of the tax season has also likely led to reopening of investors’ positions.
The bullish momentum could keep gaining traction from here as more and more reports discuss the return of the bull market in the cryptocurrency arena.