Bitcoin has formed lower highs and lower lows to create a falling wedge formation on its 4-hour time frame. Price seems to have been rejected at the resistance again, so it might be aiming for support next.
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 100 SMA lines up with the top of the wedge to add to its strength as resistance also.
RSI is pointing down to signal that selling pressure is in play, but the oscillator is closing in on the oversold region to reflect exhaustion among bears. Stochastic has some room to climb before indicating overbought conditions, but the oscillator is already turning lower to signal that sellers are eager to return.
A break below the wedge support could set off a steeper decline while a move past the resistance could hit a roadblock at the 200 SMA dynamic inflection point. If bullish momentum is sustained, Bitcoin could climb by the same height as the wedge, which spans $3,300 to around $4,300.
Bitcoin seems to be on shaky footing these days as positive developments remain scarce and some of the spotlight is on the potential loss of $190 million in cash and cryptocurrency with Quadriga.
Recall that the CEO of Canada’s largest bitcoin exchange suddenly died without being able to pass lock codes to a successor, leading the company to file for creditor protection. As his widow wrote in the filing:
The laptop computer from which Gerry carried out the company’s business is encrypted and I do not know the password or recovery key. Despite repeated and diligent searches, I have not been able to find them written down anywhere.
According to report filings, Quadriga holds around 26,500 bitcoin, 200,000 litecoin, 430,000 ether, as well as over $2 million in other altcoins.
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