Bitcoin recently broke through a long-term ascending trend line and has also completed its pullback. Price has been able to bust through most of the support levels marked by the Fibonacci extension tool as well.
However, the 100 SMA is still safely above the slower-moving 200 SMA to indicate that the path of least resistance is to the downside. In other words, the uptrend might still be able to resume from here. After all, there seems to be some buying pressure returning at the 200 SMA dynamic inflection point. A break below this could send bitcoin to the full extension at $7,914.00 next.
RSI is already indicating oversold conditions or exhaustion among sellers. Turning back up could indicate that bullish pressure is about to pick up and take bitcoin back to the area of interest around $10,000 or even to the broken trend line closer to $11,000. Stochastic is heading south to show that there is still some bearish momentum left, but the oscillator is approaching the oversold region to also show that sellers are tired.
BTC/USD Chart – TradingView
Many are pinning the blame on the launch of Bakkt futures as the reason for bitcoin’s crash. After all, a similar price reaction was seen in the launch of bitcoin futures by CME and CBOE in late 2017, and the selloff did persist for months after. To make things worse, the reception of the Bakkt futures seems to have been lackluster, suggesting that institutional investors might not be as interested in bitcoin as they used to be.
Then again, fundamentals are looking positive for bitcoin, at least when it comes to the halving of mining rewards early next year. Although the hash rate has fallen recently, the move is understandable given how it has surged to one all-time high after another prior to that.
Images courtesy of TradingView
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