Bitcoin looks ready to resume its slide as it hit resistance at the mid-channel area of interest on the descending channel on its 1-hour chart. The price could head south to the Fib extension levels marked below.
the 38.2% level is around the $10,000 major psychological support while the 50% level is around $9,050 and closer to the channel bottom. The 61.8% level is around the $8,500 mark while the 78.% level is at $7,854. The full extension is around the $7,000 major psychological level.
RSI is turning higher to show that bullish pressure is returning, possibly enough to take bitcoin up to the channel top around $12,000. Stochastic is also turning higher to show that buyers are returning and could still take bitcoin back above the mid-channel area of interest.
The 100 SMA is still above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, resistance is more likely to break than to hold. However, the moving averages might simply be oscillating to show that consolidation could carry or that a bearish crossover might follow.
BTC/USD Chart – TradingView
Bitcoin seems to be struggling to recover as Congress is looking closer into cryptocurrencies after interest spiked on the announcement of Facebook’s Libra. Many worry that this could destabilize the current financial system, as suggested by Fed Chairperson Powell and US President Trump. With that, traders are wary of stricter regulation being constructed as a result.
Still, there are a number of factors that could keep bitcoin supported in the longer run, such as the potential for increased institutional investment and the upcoming “halvening” in May 2020. Analysts have pared their estimates for the year, though, to take into account the recent declines and potential oversight on the industry. For now, markets might stay in wait-and-see mode while reserving bigger reactions for actual catalysts.
Images courtesy of TradingView
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