These Technical Indicators See Bitcoin in Uptrend Towards $12K

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These Technical Indicators See Bitcoin in Uptrend Towards $12K

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.

BTCUSD RSI stands overbought. Source: TradingView.com

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.

BTC/USD RSI stands overbought as price breaks out of consolidation range. Source: TradingView.com

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).

BTCUSD moving average ribbon indicates a bullish continuation. Source: TradingView.com, Crypto Hamster

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.

Bitcoin was trading 1.44 percent lower at $10,949 at the time of this writing.

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