Bitcoin looks ready to resume its slide as it bounced off the mid-channel area of interest once more and is eyeing the Fib extension levels as downside targets.
Price is closing in on the 38.2% level at the $3,450 area and might move all the way down to the 50% level that lines up with the swing low. Sustained selling pressure could drag it down to the 61.8% extension at $3,376 or the 78.6% extension at the channel bottom. The full extension is located at the $3,250 level.
The moving averages continue to hold as dynamic resistance at the middle of the channel, and 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 gain traction than to reverse. A break past these levels could lead to a test of the $3,600 area or the top of the channel.
RSI is already pointing down to signal that selling pressure is returning. The oscillator has some room to move south before hitting the oversold region, which means that bears could hold on to the upper hand for much longer. Stochastic is on the move up to signal that there is some bullish momentum left, but the oscillator appears to be turning lower as well.
Bulls seem to be putting up a good fight as Twitter CEO Jack Dorsey recently reiterated his prediction that bitcoin will “probably” become the internet’s “native currency.” He cited:
“I believe the internet will have a native currency and I don’t know if it’s bitcoin. I think it will be [bitcoin] given all the tests it has been through and the principles behind it, how it was created. It was something that was born on the internet, was developed on the internet, was tested on the internet, [and] it is of the internet”