Bitcoin is trending lower in a descending channel on its 4-hour time frame and is currently pulling back to the top. Holding as resistance could push the price back down to support around $5,800 or lower.
The 100 SMA has crossed below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. This means that the downtrend is more likely to resume than to reverse. However, a move past the channel resistance around $6,400 could be enough to signal that buyers might push for a reversal.
In addition, a bullish divergence can be seen on the oscillators. RSI has formed higher lows while the bitcoin price had lower lows since last week, and the same goes for stochastic. Both oscillators are climbing out of the oversold region and have room to head north before indicating oversold conditions, so more gains could be in the cards.
After breaking past the channel top, bitcoin has yet to contend with the next barrier around $6,500 then the area of interest at $6,800. From there, the price could test the dynamic resistance at the moving averages spanning $7,000 to $7,200.
Bitcoin appears to have gained support from the ongoing turmoil in Turkey, but words of assurance from the country’s finance minister and the corresponding pickup in the lira have eased fears of contagion. Another factor that’s keeping bitcoin gains in check is the negative commentary from ex-PayPal CEO Harris who said in an interview with CNBC:
The cult of bitcoin [makes] many claims — that it’s instant, free, scalable, efficient, secure, globally accepted and useful — it is none of those things.
Furthermore, Harris remarked that “there’s just no value there” and that bitcoin could keep sliding until it gets “eventually a whole lot closer to zero.” He also mentioned that “Bitcoin makes no revenue, no profitability.”
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