Bitcoin is trading inside a symmetrical triangle on its 4-hour time frame and seems to have its sights set on the top. Price just recently bounced off support around $7000 and is hovering around the mid-triangle area of interest around $8000-8500.
A move past this level could lead to a test of the actual resistance at $9000 or even a break higher. However, the 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. This means that there’s a chance the drop could resume and another test of support could ensue.
Then again, the gap between the moving averages is narrowing to signal weakening bearish pressure. If an upward crossover materializes, more buyers could join and sustain the climb, possibly even past the triangle resistance.
Note that the chart pattern spans $6000 to $13,000 so an upside break could lead to a rally of the same height. For now, though, stochastic is turning lower to show that sellers are taking over while buyers take a break. RSI is also on the move down to signal that bearish pressure is present.
Bitcoin price has ticked higher towards the end of the previous week as profit-taking leading up to the tax filing deadline is almost over. Traders are now anticipating a strong rally after the deadline passes as investors reopen their positions.
After all, big hedge funds are reportedly gearing up to place bets on the industry so other market players might rush to join in. The second quarter of the year has also historically proven to be bullish for the cryptocurrency so traders would likely take advantage of this pattern.
Geopolitical risk is still in play but this seems to be weighing on the dollar instead of boosting its safe-haven appeal. Over the weekend, the US military launched strikes in key areas of Syria so traders might be on edge for retaliation.
*The market data is provided by TradingView.