Bitcoin continues to climb as it failed in another attempt to break below the $5,800 mark. This could lead to the creation of a double bottom on the daily time frame, signaling that a long-term uptrend is in order.
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 selloff is more likely to resume than to reverse. The 100 SMA also appears to be holding as dynamic resistance for the time being.
Then again the gap between the indicators is narrowing to signal weakening bearish pressure. A bullish crossover may take longer to happen, though.
RSI is still climbing to show that buyers have a bit more energy to take price higher, but the oscillator is closing in on the overbought zone to reflect exhaustion. Stochastic is already in the overbought area and turning lower could bring a return in selling pressure. In that case, bitcoin could fall back to the lows at $5,800.
Price would still need to complete the formation by testing the neckline around $8,500, with an upside breakout enough to confirm that a climb is in order. This would make the chart pattern around $2,700 in height so the resulting climb could be of the same size.
Bitcoin has drawn support from the pickup in risk appetite in global financial markets, partly attributed to the US-Mexico trade deal. It also helps that new data from the CFTC revealed a decline in bearish bets on bitcoin futures, which could open the path for a stronger rebound expected before the end of the year.
However, investors might still hold out ahead of the SEC decision on bitcoin ETF applications. The regulator is reviewing its earlier decision to reject some applications and is still conducting the comment period for another set until next month.
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