Bitcoin seems to be resuming its slide as it hit resistance at the mid-channel area of interest on its 4-hour time frame. The price could aim for the 38.2% extension next, and stronger selling pressure could take it down to the full extension at $7,000.
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 gain traction than to reverse. The price also found resistance at the 200 SMA dynamic inflection point and is trading below the 100 SMA as an indication of bearish pressure.
However, stochastic is already indicating oversold conditions or exhaustion among sellers. Turning back up could mean that buyers are just taking over and could still push for a test of the nearby resistance levels. RSI is also heading lower to show that selling pressure is still in place but is weakening.
Bitcoin is closing in on the 38.2% level around $9,700 while the 50% level lines up with the swing low at $9,000. Stronger selling pressure could take it down to the 61.8% level at $8,535 or the 78.6% level at $7,834.
BTC/USD Chart – TradingView
Bitcoin continues to reel from the prospect of stricter regulation as US officials have turned their attention to potential risks from Facebook’s Libra. Recall that this announcement sparked strong mainstream interest on the rest of the cryptocurrency industry, but the gains were returned when the likes of Fed Chairperson Powell and US President Trump raised concerns about digital currencies.
Over in China, a court ruled that bitcoin is property, which more or less gives it legal status in the country. Although it is still technically not considered fiat money, bitcoin purchases would likely not be banned and would be protected by Chinese civil laws. This could also serve as a precedent for other and higher Chinese courts.
Images courtesy of TradingView
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