Bitcoin (BTC) Price Analysis: Is That a Daily Triangle Breakdown?

Bitcoin (BTC) Price Analysis: Is That a Daily Triangle Breakdown? 13

Bitcoin was previously consolidating inside a symmetrical triangle formation but it looks like support has been broken. This suggests that a longer-term selloff may be underway, but technical indicators are giving mixed signals.

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 selloff is more likely to carry on than to reverse. The short-term moving average also recently held as dynamic resistance, and the gap is widening to reflect stronger selling momentum.

However, RSI is already indicating oversold conditions or that sellers are exhausted. Turning back up could draw buyers back in and lead to another move back to the broken support or even inside the triangle. Similarly, stochastic is also in the oversold region but has yet to pull back up.

Bitcoin (BTC) Price Analysis: Is That a Daily Triangle Breakdown? 14

The ongoing probe by the US Justice Department is spreading some jitters in the bitcoin world as many are chiming in on how bitcoin prices were likely manipulated. It doesn’t help that Mt. Gox bitcoins continue to be sold in order to pay off creditors, further weighing on prices.

To top it off, risk aversion in the financial markets stemming mostly from political uncertainties in Europe are also weighing on bitcoin. Italy might be due for another round of polls soon as top leadership positions are still in a shakeup while Spain faces a vote of confidence in its PM Rajoy on Friday.

Meanwhile, the dollar has the NFP report coming up and traders are expecting a stronger pickup in hiring. Of particular interest also is the average hourly earnings figure as policymakers are keeping close tabs on wage growth. Disappointing results, however, could be favorable for BTC/USD if the dollar selloff is strong enough.