Bitcoin is back to consolidation mode as it formed higher lows and lower highs in another symmetrical triangle pattern. Price is nearing the peak of the formation so a breakout might be due soon.
The moving averages are still oscillating to reflect range-bound action, barely providing any strong directional clues at the moment. Stochastic is pointing higher, though, so there may be some bullish pressure left. Similarly RSI is turning higher without reaching oversold conditions, indicating that bulls are eager to return.
In that case, bitcoin closing above the triangle top around $6,400 could be enough to confirm an upside break that could be followed by an uptrend. This might last by the same height as the chart pattern, which spans $6,000 to around $7,400. On the other hand, a break below support around $6,200 could lead to a drop that’s the same size.
Bitcoin had a mostly positive run in the previous week on strengthening expectations for more institutional investment. However, some of these gains were returned on regulatory jitters, likely when the SEC announced the end of its public comment period for bticoin ETF applications, which meant that a decision was due soon.
It didn’t help that the FOMC announcement inspired more dollar strength and risk aversion on expectations of a December hike or higher borrowing costs. This likely dampened investors’ demand for higher-yielding assets like stocks and cryptocurrencies.
Traders continue to hold out for more market catalysts, with reports suggesting that huge volumes of bitcoin holdings are being moved from exchanges to wallets perhaps as pre-cautionary measures in the past week. Some say that this may have been spurred by the US government crackdown on EtherDelta, which the SEC has filed charges on its founder for operating an unlicensed decentralized exchange.