Bitcoin Price Key Highlights
- Bitcoin price broke down from its short-term consolidation and is down to the longer-term channel support.
- A bounce could still allow the uptrend to resume and take price to the resistance at $7,000.
- A break below current levels could lead to a pickup in selling pressure and prolonged declines once more.
Bitcoin price tumbled below its short-term consolidation to test the bottom of its ascending channel on the 4-hour chart.
Technical Indicators Signals
The moving averages are oscillating to reflect earlier range-bound conditions and have yet to catch up to the sharp drop. However, the 100 SMA seems to be holding its head above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, support might be more likely to hold than to break.
In that case, bitcoin price could recover to the top of the channel around $7,000 or at least until the mid-channel area of interest at $6,600. The moving averages might also hold as near-term resistance levels in the event of a bounce.
Stochastic is pointing down to signal that sellers have control, but the oscillator is nearing oversold conditions to signal exhaustion. Turning back up could bring buyers back to the mix and allow the uptrend to resume. RSI has already reached oversold levels and is starting to turn back up to indicate that buyers are ready to return.
BTCUSD Chart from TradingView
Bitcoin price sold off sharply on news of an outage in Canada’s MapleChange, which led to a loss of more than 900 bitcoins on a security issue. The company attempted to reassure clients but later on took down its social media accounts and the website itself, causing more concerns.
Keep in mind that the industry is just starting to make a bit more headway in terms of assuring regulators and gaining more institutional investments, but this development could put it a step back.