Bitcoin managed to keep its head above the key $3,600 barrier but is still facing plenty of nearby resistance levels. After all, this might be a mere pullback from an ongoing downtrend.
The price is inside a descending channel with its lower lows and lower highs. Support held and a correction to the resistance may be underway. In addition, the Fibonacci retracement tool shows where more bears might be waiting.
Bitcoin is closing in on the 38.2% Fib that lines up with the mid-channel area of interest. A larger pullback could last until the 61.8% Fib near the top of the channel, a broken short-term rising trend line, and the $4,000 major psychological mark. If any of the Fibs hold as resistance, the price could slump back to the swing low or the bottom of the channel closer to $3,500.
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 resume than to reverse. The 200 SMA also lines up with the 50% Fib to add to its strength as resistance. Then again, the price is already above the 100 SMA dynamic inflection point, so there may be some bullish pressure building up.
RSI is already in the overbought zone to signal exhaustion among buyers and is starting to point south to indicate a return in selling momentum. Stochastic has a bit of room to climb before hitting the overbought zone but is at that area where bullish momentum is starting to slow.
Bitcoin appears to have drawn support from rumors that Russia might look into the cryptocurrency to replace US dollar reserves on sanctions imposed. Another factor that may be propping it up is the upcoming ethereum Constantinople hard fork that may be leading traders to transfer some of their holdings to bitcoin.
Images courtesy of TradingView