Bitcoin was once again rejected on a test of an area of interest visible on the 4-hour time frame. Price could fall back to the longer-term floor around $5,880 from here as technical indicators reflect the presence of selling pressure.
The 100 SMA is below the longer-term 200 SMA, indicating that the path of least resistance is to the downside. In other words, there’s a stronger chance for the downtrend to resume than to reverse.
In addition, the 100 SMA is holding as a dynamic resistance level since it lines up with the area of interest around $6,600. The gap between the moving averages is widening to reflect strengthening selling pressure.
RSI is still heading down to show that bearish momentum is present and could be strong enough to take it down to the next support level. Stochastic is also pointing down so bitcoin could follow suit. Once both oscillators hit oversold levels and turn back up, buyers could jump back in and defend the bottom again.
Bitcoin appears to be giving way to the rally in stocks and commodities, as the pickup in risk appetite has favored these traditional assets. After all, the gains are spurred by optimism that the trade talks between the US and China could produce positive updates this week, pushing these markets even higher.
Meanwhile, the economic turmoil in Turkey has taken the back seat, although there seems to be no signs of improvement just yet. The country’s central bank has pledged to take action to keep the lira from further depreciating but sanctions might still loom as they refuse to release the pastor.
The dollar also has the FOMC minutes to contend with, although this might be a non-event as all eyes and ears are on the talks between the US and China. Bitcoin traders might also be holding out until the SEC makes its ruling on bitcoin ETF applications next month.
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