BTCUSD has formed higher lows but is finding resistance at $608, creating a small ascending triangle on its 1-hour chart. Price is approaching the peak of the consolidation pattern so a breakout might be due soon.
RSI is on middle ground, barely offering any clues on which direction the breakout could go. Stochastic is closer to the overbought zone so a downside break could be possible. In that case, BTCUSD could make its way towards the next support at the 100 SMA or 200 SMA then onto the area of interest between $575-580.
The 100 SMA is above the 200 SMA on the 1-hour chart, suggesting that the path of least resistance is to the upside. A long green candle closing past $610 could be enough to confirm a bullish breakout. Also, the gap between the moving averages is widening so this means that buying pressure is getting stronger.
If an upside breakout takes place, BTCUSD could climb by an additional $25-30, which is the same height as the mast of this flag or pennant formation. It also helps the bulls’ case that bitcoin just came off a recent strong rally so it could be a matter of waiting for the next big catalyst before the ongoing trend resumes.
Data from the US economy has been weaker than expected these days, supporting the idea of having no interest rate hikes from the Fed this year. This could keep a lid on the dollar’s gains and allow bitcoin to take advantage, especially since the cryptocurrency tends to rally during risk-on days.
A couple of Fed officials are scheduled to make speeches this week, and cautious remarks from George and Rosengren could reinforce dollar weakness against bitcoin. Other possible catalysts include the central bank statements from the ECB and BOC, as well as the BOE Inflation Report hearings.