Bitcoin seems to have completed its pullback to the area of interest previously marked, and the bounce suggests that the uptrend is resuming. The Fibonacci extension tool shows the next potential upside targets from here.
The 38.2% extension is around the swing high of $7,100 while the 50% level is closer to the $7,200 major psychological level. The top of the channel coincides with the 61.8% extension near $7,300. Stronger bullish momentum could take bitcoin past the channel resistance and onto the 78.6% extension at $7,450 or the full extension at $7,639.20.
The 100 SMA is above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. In other words, the uptrend is more likely to resume than to reverse. In addition, the 200 SMA lines up with the channel support and swing to act as a line of defense in the event of another dip.
RSI is still heading up to show that there’s some buying pressure left before overbought conditions are seen. Stochastic also has room to climb but appears to be turning back down to signal a return in selling pressure. The mid-channel area of interest seems to have triggered some take-profit orders, hence the bounce.
Traders still seem optimistic that the SEC could soon grant approval to bitcoin ETF applications on the lack of any negative updates from the regulator over the past few days. However, the cryptocurrency might be stuck in limbo for a while longer since the next batch of rulings aren’t due until the end of September.
In the meantime, a return in risk-off flows in financial markets has weighed on cryptocurrencies as Trump reiterated plans to slap another round of tariffs on China. Of course the Chinese government is also waiting with retaliatory measures, reviving uncertainty and dampening demand for riskier assets like bitcoin.