Bitcoin has been trading sideways, bouncing off support at $5,800 and finding resistance at $6,800. Price could test the bottom of the range now that it’s fallen below the area of interest at the middle.
The 100 SMA is below the longer-term 200 SMA on this time frame to indicate that the path of least resistance is to the downside. However, the gap has narrowed enough to signal that a bullish crossover may be imminent. In that case, buyers could return and allow support to hold.
RSI is also turning higher to signal a potential return in bullish momentum. Stochastic has already made its way up and bitcoin could follow suit.
However, the cryptocurrency industry has had another flurry of negative updates in the past few days. This started from remarks by well-known American economists who took apart the features of bitcoin such as anonymity and volatility, explaining that this could prove to be the cryptocurrency’s downfall.
A security breach on Bancor also weighed heavily on sentiment, reviving fears of further hacks and stolen tokens. The latest theft reportedly affected $13.5 billion in cryptocurrency.
Meanwhile, the dollar has mostly held its ground on safe-haven buying and stronger tightening expectations. PPI figures released earlier in the week sparked speculations of an upside CPI surprise while Fed officials reiterated their support for more hikes this year.
Looking ahead, trade war troubles could continue to hurt sentiment but it looks like traders are returning to stocks and commodities this time. Bitcoin would need a set of strong positive catalysts to revive investor optimism that the industry could see a strong rebound towards the end of the year.
Otherwise, more attention on regulation and negative commentary could keep a lid on bitcoin gains throughout the month while the US dollar could take its cues from market sentiment as usual.