Bitcoin Price Key Highlights
- Bitcoin price was previously consolidating in an ascending triangle pattern before breaking lower.
- This suggests that further losses are in the cards, especially as a small bearish flag is forming.
- Technical indicators signals are reflecting a slowdown in bearish momentum, though.
Bitcoin price could be in for more losses as it broke below the ascending triangle, but technical indicators say otherwise.
Technical Indicators Signals
The 100 SMA is below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. In other words, the selloff is more likely to carry on than to reverse. The 100 SMA is also close to the broken triangle support to add to its strength as resistance in a pullback.
However, the gap between the moving averages is narrowing to signal slowing bearish pressure. This could even be followed by an upward crossover which might draw buyers back in.
Also, RSI is indicating oversold conditions or that sellers are exhausted. Turning higher could bring bullish pressure back in and lead to a retest of the broken triangle bottom around $6,100. Similarly stochastic is in the oversold region to show that sellers might take it easy and let buyers take over.
Still, it’s worth noting that the triangle pattern spans $5,800 to $6,250 so the resulting selloff could be of the same height. A small bearish flag can also be seen to signal likely continuation.
Bitcoin has had a pretty rough week as regulatory jitters have returned and risk appetite has been subdued. Last week, Japan’s FSA stepped up its restrictions on exchanges related to AML and KYC checks and South Korea’s regulators appear to be following suit.
In the US, the DOJ has reportedly arrested 35 criminals by posing undercover in the darknet. Further arrests are expected, leading traders to stay cautious and be quick about booking profits.