Bitcoin Price Key Highlights
- Bitcoin price appears to have broken below a long-term consolidation pattern to signal a drop.
- Price is also approaching the bottom of a smaller descending channel to show that the downtrend could carry on.
- Technical indicators on this time frame also seem to be signaling that further losses are in the cards.
Bitcoin price could be gaining further bearish traction as it closed below the support of its daily symmetrical triangle.
Technical Indicators Signals
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, the selloff is more likely to resume than to reverse. The 100 SMA also held as dynamic resistance and the gap between the moving averages is widening to reflect strengthening bearish momentum.
RSI pulled out of the oversold region but is turning back lower to show that bears refuse to let up. Stochastic also moved back south without even reaching overbought conditions, which means that sellers are eager to stay in.
BTCUSD Chart from TradingView
Market Factors
Regulatory concerns and the selling of Mt. Gox bitcoin are two of the main factors being blamed for the recent slide in bitcoin price. There have been no other big industry updates lately, so it’s understandable that most investors are being spooked by the drop.
To top it off, risk appetite has been notably weaker on account of geopolitical risks in U.S. and in Europe. In particular, Spain and Italy are likely to undergo elections for its top leadership positions, and the uncertainty is weighing on the appetite for riskier assets and driving traders towards safe-havens like the dollar.
The US has the NFP report lined up later this week and stronger tightening expectations from the results could further boost the US dollar. On the other hand, a return in risk-taking on weak data and slower tightening expectations could lead to some profit-taking and a much needed BTC/USD bounce.