Bitcoin Price Key Highlights
- Bitcoin price is back to testing the symmetrical triangle bottom on its 4-hour time frame.
- Increased selling pressure could take it below support and on a continuous selloff.
- The Fibonacci extension levels show the nearby support areas where sellers could book some profits.
Bitcoin price is back in selloff mode as it tests the triangle support to determine whether further consolidation or a downtrend is underway.
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. This means that support is more likely to break than to hold. The short-term moving average also recently held as dynamic resistance as well.
Bitcoin price looks ready to test the 38.2% extension at the swing low around $7540 or the 50% extension at $7027. Stronger selling pressure could take it down to the 61.8% extension at $6516 or the 76.4% level at $5882. The full extension is located at $4859.
Stochastic is indicating oversold conditions and is starting to turn higher, though, so there’s still a chance that bullish pressure could return. RSI has some room to fall before hitting oversold levels so there may be some selling momentum left.
Note that the triangle spans $6,000 to $13,000 so the resulting downtrend could be of the same height. If support holds, a bounce back up to the resistance around $10,000 could be seen.
Market Factors
Twitter also announced that it would ban cryptocurrency ads on its platform, following in the footsteps of Facebook and Google. This could dampen investor interest and volumes, which led several traders to liquidate positions in anticipation of low volatility.
Prior this, the mood in the industry has already been pretty somber since Japan has announced plans to shut down Binance in the country and South Korea echoed the same sentiments. Combined, this would mean lower volumes worldwide as both countries account for majority of bitcoin transactions.