Bitcoin Price Analysis: BTC/USD Short-Term Downside Breakout

Bitcoin recently broke below its short-term triangle consolidation pattern to indicate that a selloff is underway. Price could aim for the bottom of a longer-term triangle pattern visible on the 4-hour time frame from here.


However, the 100 SMA is above the longer-term 200 SMA to signal that the path of least resistance is to the upside. In other words, there’s still a chance for bullish momentum to kick in, but probably on a test of the lows around $6,400. The price broke through the 100 SMA dynamic inflection point but might also find some support at the 200 SMA next.

Stochastic is on the move down so price might follow suit while sellers have the upper hand. This oscillator has some room before reaching oversold levels, so sellers could stay in control for a bit longer. RSI is also moving south to confirm that bearish pressure is present, but could also see a bounce once it reaches oversold levels.

Sentiment appears to be dampened by the IMF report warning on cybersecurity threats and how cryptocurrencies might be affected. Its latest World Economic Outlook cited:

Cybersecurity breaches and cyber attacks on critical financial infrastructure represent an additional source of risk because they could undermine cross-border payment systems and disrupt the flow of goods and services. Continued rapid growth of crypto assets could create new vulnerabilities in the international financial system.

Furthermore, the IMF pointed out:

An indiscriminate rollback of post-crisis regulatory reform and oversight—both domestically and internationally—could encourage excessive risk-taking, leading to a further buildup of financial vulnerabilities.

To add to that, the IMF downgraded global growth forecasts, particularly for the US and China to account for trade war troubles. This likely weighed on risk appetite as well, leading investors to dump higher-yielding holdings like Bitcoin and its peers.


Images courtesy of TradingView

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