Bitcoin (BTC) Price Analysis: Long-Term Correction Still Ongoing?

Bitcoin (BTC) Price Analysis: Long-Term Correction Still Ongoing? 13

Bitcoin is testing the highest Fibonacci retracement level on its downtrend correction, but it looks like bears are defending it well. The 61.8% Fib lines up with the former support around $9,700 and if it continues to hold as a ceiling, bitcoin could resume the drop to the swing low.

The 100 SMA is above the longer-term 200 SMA on this 4-hour chart, though, so the path of least resistance is still to the upside. In addition, the shorter-term moving average is currently holding as dynamic support. A break below this could still find some bulls at the 200 SMA dynamic inflection point.

Stochastic is starting to pull up from the oversold region to signal a return in bullish pressure. RSI, on the other hand, has some room to fall so sellers could remain in play for a bit longer. A move below the 38.2% Fib and 200 SMA could send bitcoin falling to the $6,500 support.

Bitcoin (BTC) Price Analysis: Long-Term Correction Still Ongoing? 14

It seems that negative remarks from investing expert Warren Buffet has dampened hopes in bitcoin, even after the cryptocurrency enjoyed one set of positive industry updates after another earlier on. It doesn’t help that the pickup in risk aversion after Trump’s announcement that the US will quit the Iran deal also weighed on appetite for bitcoin.

Earlier this week, it has also been reported that the launch of bitcoin futures caused the crash in December 2017. According to the Fed paper, this allowed pessimists to enter the market and contribute to selling pressure. Furthermore it stated:

“If a different cryptocurrency becomes more widely used as a means of exchange in the markets currently dominated by Bitcoin, demand for Bitcoin may drop precipitously because these tend to be winner-takes-all markets.”

On a less downbeat note, NYSE parent company ICE is set to launch a bitcoin exchange, offering traders a swap contract that will allow customers to get their hands on Bitcoin the following day.

*The market data is provided by TradingView.