The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that the climb is more likely to gain traction than to reverse. Price already found support at the 100 SMA dynamic inflection point that’s above the 38.2% Fibonacci retracement level, but a larger pullback could still dip to the 50% Fib near the broken triangle resistance.
A much larger correction could reach the 61.8% Fib that’s closer to the 200 SMA dynamic support. A break below this level and the triangle bottom could signal that sellers still have the upper hand. Volume is subdued for now, confirming that a correction is taking place.
Stochastic is turning higher without even dipping to the oversold region, indicating that buyers are eager to return. In that case, bitcoin could revisit the swing high around $7,450 soon and make its way higher. ADX is starting to head lower, suggesting a return to range-bound price action.
Bitcoin appears to be taking its cues from risk appetite as the altcoin is rallying while stocks and commodities are also recovering from earlier losses. Although there are still strong concerns about the coronavirus outbreak, it seems that investors are drawing hope from the stimulus efforts by governments and central banks.
The meeting among oil producers is also keeping risk-taking in play these days as this could provide a bit more reprieve for markets. If the negotiations push through and result to an agreement to trim output, bitcoin might also be able to take part in risk rallies.
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