Bitcoin is still stuck inside its descending wedge consolidation pattern but might be attempting a bullish breakout. Price is trying to close above the short-term descending channel that’s been holding since the start of the month, indicating that bulls might just be ready to charge.
The price would also need to break past the 100 SMA dynamic resistance close to the wedge top to signal that buyers are in control. This moving average is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, resistance is more likely to hold than to break and the downtrend would likely resume.
RSI is suggesting that bulls might have some more energy left, though, as the oscillator has a lot of ground to cover before indicating overbought conditions. This could keep Bitcoin on the move north and on its way to test the 200 SMA dynamic inflection point next.
Stochastic hasn’t quite reached the overbought zone but is starting to turn lower to signal that sellers are eager to return. A break below the channel and wedge bottom around $3,200 could lead to a drop that’s the same height as the wedge pattern. Similarly, a move past the resistance could lead to a rally of the same size.
Bitcoin is still struggling to regain its bearings but buyers seem to be drawing fresh hope from the appointment of pro-bitcoin Mick Mulvaney as Trump’s Chief of Staff. He has previously stated that the Fed is manipulating the dollar and that Bitcoin isn’t prone to such manipulation.
It’s no secret that Trump isn’t a fan of Fed tightening and the upcoming FOMC decision could come with a rate hike again. Then again, the central bank would likely tone down its hawkishness and possibly signal a slower pace of hiking next year, which might be dollar bearish and bitcoin could take advantage.
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