Bitcoin is still in selloff mode but there are more signs of bullish exhaustion on the daily time frame. For one, RSI and stochastic have indicated oversold conditions and are starting to turn higher to reflect the return of bullish pressure.
To top it off, RSI has formed higher lows while bitcoin price made lower lows to hint that a rally may be in the works. Stochastic has also shown higher lows since the third week of November while price had lower lows then.
If a big bounce takes place, price could make it up to the area of interest around the falling trend line connecting the highs since August or the former support around the $6,000 handle. The 100 SMA is below the longer-term 200 SMA, though, so the path of least resistance is to the downside. In other words, the downtrend is still more likely to resume than to reverse.
Also, the gap between the moving averages is widening to reflect increased bearish momentum. The area of interest or potential resistance is also between these moving averages, which could serve as dynamic inflection points.
Even with the seemingly unstoppable slide in bitcoin, big names in the industry are holding on to their optimistic expectations. For CEO of cryptocurrency merchant bank Galaxy Digital Mike Novogratz, bitcoin is “digital gold” and will survive in the long run:
“I do believe Bitcoin is going to be digital gold. That means it’s the only one of the coins out there that gets to be a legal pyramid scheme — just like gold is.”
He further pointed out that revolutions don’t happen overnight, explaining:
“All the gold ever mined in the history of the world fits in an Olympic-size swimming pool. You’re out of your mind to think that pool’s worth $8 trillion. But it is because we say it is.”