Bitcoin could be due to resume its slide as it hit resistance at the top of a short-term descending channel visible on the 1-hour time frame. Applying the Fib extension tool shows the next potential downside targets.
The 38.2-50% levels are around the mid-channel area of interest at $6,500 while the 78.6% level is closer to the channel support at $6,350. Stronger selling pressure could take it down to the full extension at $6,268.
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. The 100 SMA appears to be holding as dynamic resistance at the moment while the 200 SMA is just close by, adding another layer of resistance.
Stochastic is already on the move down without hitting the overbought zone, indicating that selling pressure is picking up. RSI appears to be treading sideways to reflect consolidation but is also slightly turning south, confirming that bears have the upper hand.
Traders are holding out for another set of positive catalysts in the Bitcoin industry to sustain its strong climb from the previous week. So far, the Fidelity announcement of its institutional platform has given investors reason to be optimistic, but the larger availability of the platform and stronger surge in investments would likely come in Q1 or Q2 next year.
The launch of ICE Bakkt Bitcoin futures is closer at December 12, giving some market watchers reason to be wary of another potential fall in prices. After all, the CME Bitcoin futures launch late last year was being blamed for the strong selloff that happened then as it exposed Bitcoin to short positioning. It might be a different story this time around, though, as investors have more positive news to look forward to in the first half of 2019.
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