Bitcoin seems to have broken below its symmetrical triangle on the 4-hour chart but is still finding support at the bottom of the descending triangle on the same time frame. Another breakdown might be looming, possibly sending bitcoin lower by the same height as the formation.

The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, support is more likely to break than to hold. The price is trading below both moving averages, so these could keep holding as dynamic resistance in the event of a bounce.

RSI is already indicating oversold conditions and could be due to turn higher soon. In that case, the price could recover back to the triangle top around the $10,500 level or even break higher. Stochastic is also in the oversold region to show that sellers are already exhausted, and turning higher could signal that buyers are returning.

BTC/USD Chart – TradingView

More bitcoin bears returned to the markets following the failure to make fresh highs or break above consolidation. Many blame the recent announcement of China to make its own state-backed cryptocurrency, possibly leading bitcoin and its peers to lose one of their largest markets.

A break below another major support level could set off a sharper drop as the triangle spans around $9,500 to $13,500. For now, traders still seem to be holding out for any positive news that could lead to another bounce or at least to see if bulls would defend this key level.

Meanwhile, fundamentals remain positive for bitcoin as the “halvening” next year is keeping bullish interest in play while traders are also looking forward to the launch of Bakkt in September. Risk aversion in traditional financial markets is also a plus as this could drive investors away from stocks and commodities towards alternative holdings like bitcoin.

Images courtesy of TradingView

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