Bitcoin bulls continue charge after previously busting through the neckline of a double bottom reversal pattern. Price also broke above its bullish flag continuation pattern to signal further upside momentum.
Price is stalling at the next area of interest so another pullback or bullish flag may be due. In any case, a rising trend line can be drawn to connect the latest lows of bitcoin price movements, so this may hold as a near-term floor.
The 100 SMA has completed its crossover from the 200 SMA to indicate that the path of least resistance is to the upside. This means that the uptrend is more likely to resume than to reverse. The moving averages are also near the trend line to add another layer of dynamic support on a larger pullback.
RSI has reached overbought conditions, though, which means buyers are feeling exhausted. Turning lower could bring selling pressure back in and support a pullback. Similarly stochastic is turning down from the overbought region so bitcoin price could follow suit.
Near-term support may be found around $6,400 or at the $6,200 area near the moving averages. A break below this region could lead to another test of support at $5,800.
Some say that the recent rally is merely a dead cat bounce since there appear to be no major catalysts sustaining the gains. Others attribute this to profit-taking from the earlier losses and some optimism that the new month and quarter could bring more positive developments.
The US dollar has been mostly supported despite headlines on further trade tensions, but it seems that cryptocurrencies are attracting more of the risk-on flows. After all, stocks and commodities appear to be on weaker footing and vulnerable to any trade war escalation.
Analysts continue to make strong predictions for bitcoin price in the coming months, with some projecting that it could reach $20,000 to $50,000 by the end of the year.
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