Bitcoin is trending lower on its 4-hour chart as it moves inside a descending channel. The price bounced off support and has pulled up to the mid-channel area of interest.

This lines up with the 50% retracement level around the $11,200 mark that might be enough to keep gains in check. If so, the price could resume the slide to the swing low around $9,050 or the channel support closer to $8,800. A larger pullback could last until the 61.8% Fib at $11,610 or the top of the channel at $12,000.

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, the selloff is more likely to gain traction than to reverse. The 200 SMA also seems to be holding as dynamic resistance but the price has yet to move below the 100 SMA to confirm bearish momentum.

RSI is treading sideways to indicate further consolidation but also seems to be heading lower to signal that sellers have the upper hand. Stochastic is also heading south to show that bearish pressure is in play.

BTC/USD Chart – TradingView

Prices made quite the recovery by the end of the previous week despite mostly negative sentiment surrounding potentially stricter regulation. This comes after the Facebook Libra announcement that generated a lot of attention but also criticism from US officials.

Congressional hearings on Facebook’s Libra are being watched closely as this could spell the fate of the entire industry. However, it seems that profit-taking off a key level spurred a relief rally before the end of the week.

Still, any indications that regulations could be tightened as more government officials express concerns might erase most of the recent gains and push digital coins back into bear market territory. As it is, US officials seem concerned that cryptocurrencies could potentially destabilize the political establishment.

Images courtesy of TradingView

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