Bitcoin previously consolidated inside a symmetrical triangle to signal a pause from its decline, but this served as a continuation signal. Price already closed below support and the $4,000 major psychological mark to confirm that bears are still in control.
The 100 SMA is above the longer-term 200 SMA for now to show that the path of least resistance is to the upside or that there’s still a chance for the climb to resume. However, the gap between the two is narrowing to signal a possible bearish crossover and price is trading below the 200 SMA as an early signal that bears are regaining the upper hand.
RSI is pulling out of the oversold region, however, suggesting that buying pressure might still return. Stochastic has also bottomed out and turned higher without reaching the oversold level, hinting that buyers are eager to return. In that case, a pullback to the broken triangle bottom may be underway and the moving averages could also hold as dynamic inflection points.
Bears are back in the bitcoin game as bulls haven’t been able to jump on any positive developments that would’ve sustained last week’s bounce. Although the change in sentiment was spurred by revived expectations of institutional investments, traders likely needed more than just something to look forward to but rather actual industry updates.
Apart from that, traders might have also found the time to digest SEC Chairperson Clayton’s remarks on how they probably won’t be approving any bitcoin ETF applications anytime soon. This news was overshadowed by confirmation that Nasdaq will be pushing through with bitcoin futures early next year as it works to get CFTC approval.
Also, NYSE chairman Jeff Sprecher mentioned that bitcoin is here to stay despite the recent selloff.
“The unequivocal answer is [digital assets will survive]. As an exchange operator, it’s not our objective to opine on prices.”