Bitcoin is trending lower and is creating a descending trend line with its lower lows since last week. Price looks prime for another test of this falling resistance level, which lines up with the Fibs on the latest swing high and low.
Price already seems to have bounced off the 38.2% Fib around $4,700 but has yet to form a new low, which means that the correction might still be in play. The 50% level lines up with the trend line and could be enough to keep gains in check as it lines up with the 100 SMA dynamic inflection point also.
On the subject of moving averages, 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 downtrend is more likely to resume than to reverse. The gap between the moving averages is also widening to reflect stronger selling pressure.
Stochastic is on the move up to signal that buyers still have some energy left, but the oscillator is already dipping into the overbought zone to signal exhaustion. Turning back down could allow the nearby resistance levels to hold and bitcoin to fall back to the swing low around $4,050 or lower.
RSI already seems prime for a move south so Bitcoin might follow suit. This oscillator is topping out without reaching overbought levels, which suggests that sellers are eager to return.
Volatility is picking up for Bitcoin but it struggles to pull out of its slide as more and more investors might be liquidating their positions. Thin liquidity is expected leading up to the Thanksgiving holidays, so any big headlines could cause a large swing in price.
As it is, cryptocurrencies are being dragged lower by the SEC crackdown on ICOs and decentralized exchanges. It has been reported that huge volumes are being moved from exchanges to wallets as precautionary measures.
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