Bitcoin Price Key Highlights
- Bitcoin price is finding resistance at the short-term descending trend line and area of interest.
- If the downtrend resumes, bitcoin could tumble to the Fibonacci extension levels next.
- Technical indicators confirm that the downtrend is likely to carry on from here.
Bitcoin price barely gained traction from its bounce as the short-term downtrend remains intact.
Technical Indicators Signals
The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse.
Price is also sliding back below the 100 SMA to reflect the return in selling pressure and the gap between the moving averages is widening to reflect stronger downside momentum. Another bounce could still hit resistance at the 200 SMA dynamic inflection point just past the trend line.
RSI is heading south to confirm that sellers have the upper hand so bitcoin price could follow suit. Stochastic is also moving lower but nearing oversold levels to signal exhaustion among bears.
If sellers stay strong, bitcoin price could tumble to the 38.2% extension at $5,953.7 or the swing low at the 50% extension or $5,825.5. The 61.8% extension is located near $5,700 while the 78.6% extension is at $5,514.8. The full extension is near the $5,300 level.
Market Factors
Bitcoin appears to have reeled from Jack Ma’s comments on how the cryptocurrency is likely a bubble even as blockchain technology has several applications. This comes in the heels of hacking incidents and stronger regulatory oversight in Japan.
Although the latter could potentially improve confidence and security in the industry, investors can’t help but be wary of potential restrictions in trading or exchange shutdowns. This has likely led them to be quick about booking profits, barely allowing rallies to be sustained past key technical levels.
Apart from that, the rally in the dollar has also dragged bitcoin down after trade tensions appear to be cooling.
