Bitcoin has formed lower highs to trend below a descending trend line on its 1-hour chart. Price is currently testing this resistance level and might be due to resume the slide to the swing low if it holds as resistance.
The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse. In addition, the 100 SMA lines up with the trend line resistance to add to its strength as a ceiling.
Aside from that, the 61.8% Fib appears to have held and may be enough to push Bitcoin back to the swing low or lower. RSI is already starting to head south from the overbought zone to signal a return in selling pressure while stochastic also seems to be topping out, too.
Bitcoin has suffered its worst slide in years and has lost nearly 40% of its value in just a few days. With that, it’s no surprise if the FUD sentiment could keep dragging prices down in the days ahead, unless a strong positive catalyst comes up.
Many had been hoping that the influx of institutional investments late this year or early next year could mean a pickup in volumes and prices, but that’s looking like a tough call at this point. After all, banks and funds might be discouraged to invest in this industry which is on a rapid decline. Regulatory developments aren’t looking all that friendly either, and a rejection of the Bitcoin ETF applications could spur another leg lower.
Still, there could be some hope that bulls might defend support zones as buyers try to take advantage of cheaper prices. From a technical standpoint, however, the break of key support levels might be more reason to liquidate positions, take short bets, or pursue other altcoins instead.
Images courtesy of TradingView
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