Bitcoin has broken below its symmetrical triangle consolidation pattern to signal that further losses are likely. In addition, the price is trading inside a short-term descending channel and looks prime for a test of resistance.
This resistance is around the broken triangle bottom, which might serve as an area of interest, and also the 100 SMA dynamic inflection point. On the subject of moving averages, 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.
However, RSI is turning higher to signal that buyers are returning. This might be enough to take Bitcoin back inside the triangle consolidation and onto a test of the nearby resistance levels at the 200 SMA dynamic inflection point and triangle top. Stochastic is also pulling higher from the oversold area to signal that bullish momentum could pick up. A bit of bullish divergence can also be seen as the price had lower lows while stochastic had higher lows.
Bitcoin is still struggling to stay afloat after a steep slide and a bit of consolidation, which many have considered as a continuation flag pattern as seen on the longer-term charts. It doesn’t help that risk aversion has been in play in financial markets, owing mostly to geopolitical risks like trade tensions and Brexit, discouraging traders from taking on more risk.
Besides, time is running out for any chance of a big rebound before the year comes to a close, so it’s understandable that many might be already booking profits early before further declines take place.
Still, several analysts are keeping bullish forecasts for Bitcoin, although some have pushed back expectations for a big rebound to late 2019 versus the first quarter of the year.
Images courtesy of TradingView
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