Bitcoin has formed lower highs and higher lows to create a symmetrical triangle on its 1-hour time frame. The price is currently testing the resistance and might be due for a move back to support again.

The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside or that resistance is more likely to hold than to break. In that case, bitcoin could slide back to the triangle bottom around $7,600 or perhaps make a downside break.

If that happens, bitcoin could fall by the same height as the triangle pattern, which spans $7,500 to $7,900. The gap between the moving averages is widening to reflect increased selling momentum, and the 100 SMA is currently holding as dynamic resistance.

RSI is heading higher to show that buyers still have a bit more energy left before seeing overbought conditions. This could keep bitcoin climbing past the triangle top at $7,800 and rallying by the same height as the chart formation.

Stochastic is also heading north so price might follow suit while bulls are in control, but this oscillator is starting to dip into the overbought zone to reflect exhaustion. Turning lower could show that sellers are ready to take over and push prices back down.

Bitcoin has struggled to keep up its earlier rallies and many believe that the recent slide is a much-needed correction from the stellar performance last month. There are also those who point to large market activity in profit-taking as a major player or a “whale” cashed in on a notable volume of bitcoin.

The direction of the breakout could be crucial in showing whether or not this is merely a correction or a reversal in the making. Some also warn that this may be similar to the July 2018 upsurge that was hardly sustained.

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