- Bitcoin’s uptrend has halted after staging a 12 percent bull run earlier this week.
- The cryptocurrency now expects to neutralize its overbought status with either a consolidation or a correction.
- Meanwhile, a set of technical indicators shows a bullish scenario, noting that Bitcoin could continue its rally upwards towards $14,000.
Bitcoin rallied by almost 12 percent earlier this week to establish a year-to-date high at $11,420.
Nevertheless, the benchmark cryptocurrency has since corrected downwards to the tune of as much as 7 percent. Its pullback appeared due to profit-taking sentiment among daytraders.
Also, Bitcoin fell as investors shifted focus back to the stock market after Federal Reserve decided to continue its $2 trillion stimulus program.
On a technical front, the BTC/USD exchange rate appears to have been neutralizing its overbought status. This week’s rally pushed the pair’s daily Relative Strength Index above 70. Such a move typically leads to higher selling pressure, causing an asset to lose value. It, nevertheless, does not reflect the market’s actual bias.
![bitcoin, cryptocurrency, btcusd, btcusdt, xbtusd, xbtusdt](https://bitcoinist.com/wp-content/uploads/2020/07/rtw7OwJX.png?resize=980%2C580)
Bitcoin is now left with two potential outcomes when it comes to neutralizing its overbought sentiment. First, the cryptocurrency could consolidate sideways inside a trading range until bulls refuel to continue the prevailing uptrend. Second, it could plunge downwards on further profit-taking sentiment.
Bullish Setup Ahead for Bitcoin
Incidentally, two textbook technical indicators see Bitcoin heading towards at least $12,000 even if it corrects further lower. The first of these patterns, as shown in the chart below, is a now-broken Symmetrical Triangle.
![bitcoin, cryptocurrency, btcusd, btcusdt, xbtusd, xbtusdt](https://bitcoinist.com/wp-content/uploads/2020/07/hYPBC67V.png?resize=980%2C580)
Bitcoin broke out of the Triangle range with a rise in trade volume, fitting the technical description of a breakout move. Ideally, the cryptocurrency should fly by as much as the height of the pattern. The maximum distance between the Triangle’s upper and lower trendline is roughly $1,900.
That places Bitcoin’s Triangle upside target $1,900 above from the point of breakout. It brings Bitcoin within the target range of $12,000.
Another indicator that points to a continued bullish momentum is Moving Average Ribbon (or MMR).
![bitcoin, cryptocurrency, btcusd, btcusdt, xbtusd, xbtusdt](https://bitcoinist.com/wp-content/uploads/2020/07/EeJZbJAUcAEXqOR.png?resize=980%2C502)
One crypto trader explains:
“If [MMR] flips color and holds upon retest, it is usually a reversal – if it gets tested and holds (no color flip), usually it is a continuation of a trend.”
With MMR still green, there is an extreme likelihood of Bitcoin to continue its upside run towards $12,000.
Macro Factors
The technical narratives are also likely to receive further support from macroeconomic narratives concerning the fears of inflation led by central banks’ relentless money printing, the US-China geopolitical dispute, as well as lower yields on the leading US Treasurys caused by near-zero interest rates.
The 2020 #Bitcoin $BTC bull run will be larger than 2017 one. 16-17 bull market was retail-driven, whereas the current bull market is driven by large US institutions who are using #Bitcoin $BTC as a hedge aginst / short on US Dollar.
— RamenPanda (@IamRamenPanda) July 30, 2020
Bitcoin was trading 1.44 percent lower at $10,949 at the time of this writing.