Bitcoin is still hovering at the bottom of its ascending channel on the 4-hour time frame and could be due for a bounce back to the top or at least halfway through.
The 100 SMA is below the longer-term 200 SMA, though, so the path of least resistance is to the downside. In other words, the selloff is more likely to gain traction than to reverse and support might break soon. A candle closing below the $7,900 mark could be enough to confirm that bears are taking over.
Then again, the gap between the moving averages is narrowing to signal weakening bearish pressure. Price is still trading below the 100 SMA dynamic inflection point, so this could hold as resistance as it lines up with the mid-channel area of interest.
RSI is already in the oversold region to indicate that sellers are exhausted and that buyers could take over from here. Stochastic is also indicating oversold conditions and could be turning higher to show that buying momentum could return.
BTC/USD Chart – TradingView
Analysts point to broad-based selling as the reason for the cryptocurrency’s declines, possibly as investors took profits off the declining asset and on the lack of volatility.
Besides, risk-taking has been improving as of late, drawing investors back to traditional holdings like stocks and commodities. Although uncertainties from Brexit and the US-China trade talks persist, sentiment seems to be picking up on hopes of deals being struck.
There are no major catalysts in sight for bitcoin over the next few weeks or even months, with the latest updates seemingly failing to lift the mood in the crypto markets. For one, the Bakkt bitcoin futures had a lukewarm welcome and news of China launching its own state-backed digital asset leading investors to worry that a large chunk of the global bitcoin market could be lost.
Images courtesy of TradingView
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