Bitcoin has formed higher lows and lower highs to consolidate inside a symmetrical triangle pattern. The price is currently testing support and might be due for a bounce back to the top.

The 100 SMA is below the longer-term 200 SMA, though, so the path of least resistance is to the downside. In other words, support is more likely to break than to hold. However, the price is trading above the 100 SMA to signal the presence of bullish pressure and the moving average might also hold as dynamic support at the triangle bottom.

Still, the 200 SMA dynamic inflection point lines up with the top of the triangle, adding to its strength as a ceiling. A break past the $3,600 area could be enough to signal that further gains are in the works, possibly lasting by the same height as the triangle formation that spans $3,300 to $3,900.

RSI is heading lower to confirm that selling pressure is present, but the oscillator is nearing the oversold region to signal potential exhaustion. Stochastic is already dipping into the oversold territory to signal that sellers are tired and that buyers could take over once the oscillator pulls up. A break below support around $3,450 could set off a slide that’s the same height as the triangle.

Bitcoin appears to be holding out for the next set of catalysts before determining its direction, although the momentum is currently in favor of sellers and this might merely be a flag pattern. Still, bulls are fighting to defend nearby support areas by buying on dips and the higher lows have been encouraging.

Analysts have mixed opinions on whether the bear market could persist, but it’s looking unlikely that a rebound could happen before the year closes. If anything, profit-taking might even push prices down a little lower, unless expectations for institutional investments are ramped up.

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