Bitcoin continues to hover around the resistance of its rising wedge formation and might be due for an upside break. After all, the 100 SMA is starting to cross above the longer-term 200 SMA to signal that the path of least resistance is to the upside.
In other words, resistance is more likely to break than to hold. In that case, bitcoin could be in for a steeper climb, possibly the same height as the rising wedge pattern. This spans $6,000 to around $7,400 so the resulting rally could be at least $1,400 in size.
However, RSI has been near overbought territory for quite some time and may be due to head back down. This could indicate a return in selling pressure and a dip to the wedge support just above the $7,000 handle. Stochastic is also starting to head lower after hitting overbought levels to indicate that buyers are taking a break.
Bitcoin price managed to stay supported on the lack of negative updates from the industry last week. There were also plenty of key developments in other altcoins, keeping cryptocurrency investors in an optimistic mood.
Besides, the move past the technical $7,000 barrier was enough to encourage bulls to stay in the game. Many believe that this could be the chance for bitcoin to resume its strong rebound until the end of the year, possibly hitting record levels or surpassing them.
Still, traders are on edge when it comes to the SEC decision on bitcoin ETF applications since this could be the next big catalyst. Approval could mean stronger volumes and activity for the months ahead, which might spur even more gains for bitcoin and its peers.
At the same time, the improvement in overall market sentiment on account of geopolitical developments also lifted appetite for risk, which was bullish for cryptocurrencies. Troubles in emerging markets also render bitcoin as an alternative means of storing value.