Bitcoin continues to edge lower as it trades inside a short-term channel visible on the 1-hour chart. On this descending channel, the price is treading close to the bottom, which happens to be the mid-channel area of interest on a larger channel.
On the 4-hour chart, it can be seen that Bitcoin is also on the move down and hovering at a resistance-turned-support area. A break below this could take it to the very bottom at the $3,000 major psychological level. Price would need to break below the bottom of the smaller channel before this happens though.
Sellers could still have the upper hand as the 100 SMA is below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. In other words, support is more likely to break than to hold and the downtrend is more likely to gain traction than to reverse. Key levels to watch are $3,600 and $3,400 to gauge if more declines are underway or if a pullback to the channel top at $4,000 to $4,200 is possible.
RSI recently dipped to the oversold region and is now starting to pull up to signal that buyers are returning. Similarly stochastic is turning higher after reaching the oversold region to indicate that a move higher might be in the cards.
Bitcoin appears to be struggling to hold its ground after failed attempts to break past the $4,000 mark earlier in the year and an unsustained move past an inverse head and shoulders neckline.
This suggests that buyers are not all that convinced that the rallies could last much longer, which is why profits are being booked quickly. Breaks below technical levels are being taken advantage of by sellers to push prices much lower from here. Traders are also holding out for actual developments in the industry to see where to take Bitcoin’s price next.
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