Bitcoin (BTC) Price Analysis: New Bearish Channel Forming
Bitcoin is starting to trend lower since last week’s selloff, creating a descending channel with its lower highs and lower lows on the 4-hour time frame. Price is down to the mid-channel area of interest after recently bouncing off the resistance.
A break below this near-term floor could spur a slide all the way down to the channel bottom at the $3,00 major psychological mark. The swing low at the $3,200 level could also attract some buyers.
The 100 SMA is still above the longer-term 200 SMA for now to indicate that the path of least resistance is to the upside. In other words, there’s still a chance for support to hold and spur a bounce back to the resistance at the $4,000 handle.
However, the gap between the indicators is narrowing to signal weakening bullish momentum. A bearish crossover could encourage sellers to pile on and carry on with the slide. Price is also moving below both moving averages to signal the presence of bearish pressure.
RSI is already in the oversold region and has been hanging around that area for quite some time, indicating that sellers are feeling exhausted. A return in bullish momentum might be confirmed if the oscillator climbs out of the oversold region. Stochastic is pointing down again but is hovering at the oversold region as well.
Optimism at the start of the year appears to have faded as bitcoin failed to break higher from its triangle and inverse head and shoulders chart patterns. This suggests that there’s still a lot of uncertainty weighing on the industry for the time being.
The break has also cast some doubts on bullish forecasts and whether or not this merely constitutes a short-term pullback. The break of the $4,000 level has been particularly crucial and all eyes are on the $3,600 barrier next.