Bitcoin has formed lower highs and lower lows to trade inside a descending channel on its 1-hour chart. The price recently broke below the mid-channel area of interest and is setting its sights on the actual support.
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 downtrend is more likely to gain traction than to reverse. In addition, the gap between the indicators is widening to reflect increased selling pressure and the 100 SMA lines up with the channel top around $11,200 to add to its strength as resistance.
However, RSI is already in the oversold region to signal that bearish pressure has faded. Turning back up could mean that buyers are ready to return, possibly allowing the channel bottom to hold. Stochastic is also in the oversold region and could be due to turn back up again. In that case, a bounce off the channel bottom could take it up to the channel resistance again.
BTC/USD Chart – TradingViewReports that Barclays is no longer working with Coinbase seems to have hit bitcoin hard as many worried that this might’ve been a result of a loss of trust. In other news, Goldman Sachs seems to be taking a bullish stance on bitcoin as an analyst suggested that the short-term target for the coin is $13,971 and that investors should consider buying on any dips in the current scenario.
Some say, however, that this prediction was a “kiss of death” for bitcoin and might have even exacerbated the decline. The analyst went on to say:
“Any such retracement from $12,916-$13,971 should be viewed as an opportunity to buy on weakness as long as it doesn’t retrace further than the $9,084 low .”
As it is, traders seem to be reactive to any major moves and some say that the technical break below the short-term consolidation may have spurred some FUD activity.
Images courtesy of TradingView
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