Bitcoin (BTC) Price Analysis: Another Breakdown, Another Pullback
Bitcoin has formed lower highs to trade below a descending trend line on its 1-hour time frame. Price dropped below the support at $6,200 and reached a low of $5,709.8 before making a correction.
Applying the Fibonacci retracement tool on the latest swing high and low shows that the 61.8% level coincides with the trend line and broken support. This is also within the moving averages’ dynamic inflection points.
Speaking of moving averages, the 100 SMA is safely below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. This means that the selloff is more likely to resume than to reverse. Also, the 100 SMA lines up with the 50% Fib at $6,287 and the 200 SMA lines up with the 61.8% Fib at $6,424.0.
RSI appears to be turning lower without hitting overbought levels to signal that sellers are eager to return. Stochastic has turned south after reaching overbought territory, also indicating that bears are back in the game.
Bitcoin had another rough week, so it’s not surprising that Friday spurred yet another nasty drop. It didn’t help that trade war tensions have escalated towards the end of the week, triggering another flight to safety that favored the US dollar over cryptocurrencies.
For altcoins, it was more of the news on hacking incidents that made investors quick to hit the sell button. Rallies were short-lived as profits were quickly booked at key technical levels for fear of another round of negative headlines weighing on prices.
Still, many experts stand by their forecasts that bitcoin could recover to fresh highs this year or next year. Some say that the influx of Wall Street money could bring more liquidity and volumes, although it also helps to remember that the introduction of bitcoin futures last year may have spurred the declines on increased selling activity.