Bitcoin (BTC) Price Analysis: Higher Pullback Possible
Bitcoin is trending lower on its 1-hour time frame and seems to be bouncing off the mid-channel area of interest on the descending channel. However, price has yet to make new lows or test the latest ones, so a larger pullback might still be due.
Looking at the Fib retracement tool shows that the 38.2% level is already keeping gains in check. With that, bitcoin could revisit the swing low at $3,430 or the bottom of the channel closer to $3,350. A higher correction could test the 50% Fib at $3,600 or the 61.8% Fib closer to the top of the channel and $3,650 mark.
The 100 SMA is still below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the downtrend is more likely to resume than to reverse. Then again, the gap between the moving averages has narrowed significantly to hint at a potential bullish crossover. For now, the moving averages are also holding as dynamic resistance.
Stochastic has some room to head north before indicating overbought conditions. However, the oscillator also looks ready to turn lower to signal a return in selling pressure. RSI is pointing up and has more ground to cover before reaching overbought territory, which suggests that buyers could stay in the game for a bit longer.
Bitcoin has had a rough ride in the past few days and traders are simply holding out for actual positive developments that could stem the decline and sustain rallies.
For now, the catalyst in sight is the launch of Fidelity’s institutional platform as this is widely expected to boost volumes in making bitcoin more accessible to banks and hedge funds. Of course any delays in this regard could wind up disappointing bitcoin bulls and lead to another wave lower.