Bitcoin is still in a weak spot even as it broke to the upside of a short-term consolidation pattern. Price is currently testing the 38.2% Fibonacci retracement level on the 1-hour chart, and this lines up with a descending trend line so far this month.
Apart from that, the resistance area coincides with the 50 SMA dynamic inflection point. The 100 SMA is still below the longer-term 200 SMA to indicate that the path of least resistance is to the downside or that the selloff is more likely to resume than to reverse.
Also, the gap between the moving averages is slowly widening to reflect stronger selling pressure. The 100 SMA is just above the highest Fib, adding an extra layer of resistance in the event of a break higher.
RSI is heading higher but is dipping into overbought territory to signal exhaustion among buyers. Turning lower could bring sellers back in and lead to a slide back to the swing low or lower. Similarly stochastic is on the move up but might be ready to head back down from overbought levels soon.
Bitcoin got a bit of a lift early this week on news that South Korean exchange UPBit has been cleared after investigations. This could be a positive update that the market badly needs after erasing most of its earlier gains.
Recall that institutional interest lifted prices earlier in July but a slew of negative commentary and an outage in HitBTC forced these gains to be returned. It didn’t help that South Korean officials are reportedly looking into removing tax breaks from crypto exchanges and possibly on transactions down the line.
Reports that Starbucks isn’t really accepting bitcoin as payments for coffee also dragged on investor sentiment, although this simply came as a clarification from news that it is teaming up with ICE to launch digital platform Bakkt.