Bitcoin was previously consolidating inside a symmetrical triangle and has just recently broken to the upside to signal that an uptrend may be underway. Price also seems to have completed its retest of the broken resistance and may be ready to aim for the next upside targets.
The 100 SMA is above the longer-term 200 SMA to signal that the path of least resistance is to the upside, indicating that the climb is more likely to gain traction than to reverse. The 50% level lines up with the swing high just past the $6,700 level while the 78.6% to 100% levels are close to the $6,800 area of interest.
Stochastic is turning lower to indicate a return in selling pressure, possibly even dragging bitcoin back inside the triangle pattern. RSI is also heading south so bitcoin price might follow suit.
Warnings from the IMF on bitcoin and other cryptocurrencies appear to have derailed the rallies and kept others in consolidation. According to the latest World Outlook Report:
“Cybersecurity breaches and cyber attacks on critical financial infrastructure represent an additional source of risk because they could undermine cross-border payment systems and disrupt the flow of goods and services. Continued rapid growth of crypto assets could create new vulnerabilities in the international financial system.”
It didn’t help that the IMF also downgraded global growth forecasts, particularly for the US and China on account of the trade war, and dampened investors’ risk appetite. Cryptocurrencies like bitcoin tend to benefit from a stronger appetite in risk, so the dip may have led to some profit-taking off recent bounces.
In addition, new research suggested that the Chinese market alone may be strong enough to destabilize bitcoin. The paper cited ways that China could launch attacks to disrupt the bitcoin network as 74% of mining activity is in the country.
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