Bitcoin is still trending lower in its descending channel on the 4-hour chart but bulls seem to be putting up a good fight. Price has recently formed higher lows and higher highs to trade inside an ascending channel.
The price is currently testing the channel bottom that lines up with the larger channel’s area of interest at the middle. A bounce off this could take it to the top around the $3,800 mark.
However, the 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the downtrend is more likely to resume than to reverse. A break of support from the small channel could be enough to send Bitcoin to the bottom of the large channel around $3,000.
Then again, the gap between the moving averages is narrowing to signal weakening bearish pressure. If a bullish crossover follows, buyers could return and even push past the channel top to start an uptrend.
RSI is pulling up after recently hitting the oversold region, indicating that a return in buying momentum is in order. Stochastic is also turning higher to signal that buyers are returning and that a test of the resistance may be in the works.
Big names in the Bitcoin industry are still holding on to hopes of a strong rebound, with some saying that it’s not a matter of if but when. For CEO of cryptocurrency merchant bank Galaxy Digital Mike Novogratz, revolutions take time and don’t happen overnight. He also said:
I do believe Bitcoin is going to be digital gold. That means it’s the only one of the coins out there that gets to be a legal pyramid scheme — just like gold is.
In the same interview with Bloomberg he explained:
For me, crypto was interesting because what macro guys do is try to make complicated things simple. It was macro markets on steroids.
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