Bitcoin bounced off the area of interest highlighted in the previous article, confirming that selling pressure is still in play. Price might be moving in a newly-forming descending channel and is on its way to test the bottom.
Applying the Fibonacci extension tool also shows the next downside targets. Price is currently finding support at the 61.8% Fib that lines up with the mid-channel area of interest, but stronger selling pressure could take it down to the 78.6% level closer to the channel support. The full extension is below this at the $3,400 area.
RSI appears to be turning higher to signal a return in bullish momentum from here. This could take Bitcoin back up to the channel top at $4,000 or perhaps even higher. It would need to break past the swing high and moving averages to confirm that bulls have the upper hand.
On the subject of moving averages, the 100 SMA is still below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the downtrend is more likely to resume than to reverse. This short-term moving average has also held as dynamic resistance and could continue to keep gains in check.
Stochastic is already moving north so Bitcoin might follow suit while buyers try to take over. The oscillator has plenty of room to climb before indicating overbought conditions, which suggests that buyers could stay in the game for a bit longer. Key levels to watch for a possible reversal are $4,000 then the 200 SMA dynamic inflection point at $4,500.
Still, the industry rout has gained a lot of momentum and would need a strong positive catalyst to create a bottom, more so sustain a rally. For now, there hardly appears to be any in sight as the institutional investment outlook is also dampened by the current declines.
Images courtesy of TradingView
The post Bitcoin Price Analysis: BTC/USD Aiming for Channel Support Again? appeared first on Live Bitcoin News.Full article