Bitcoin is back to testing its symmetrical triangle support after a weak bounce, signaling that sellers could gain more traction. The chart pattern is approximately $700 tall so a break below the current levels could lead to a selloff of the same height.
The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. This means that the selloff is more likely to continue than to reverse.
However, stochastic is heading up from oversold levels to show that buying pressure is picking up. This signals that a bounce back to the top at $10,000 could take place. Price has yet to move past the 200 SMA dynamic inflection point to confirm this, though. RSI also looks ready to head back up without hitting oversold conditions.
Bitcoin encountered another wave of selling after Twitter announced that it would be banning cryptocurrency ads on its platform as well, following the lead of Facebook and Google. This could severely dampen new account openings, which could keep a lid on volumes and overall activity.
The cryptocurrency industry appears to be on the back foot again recently as one set of downbeat headlines after another has been popping up. At the same time, risk aversion has extended its stay in the financial markets on lingering trade war fears, allowing the safe-haven dollar to advance even against bitcoin.
Looking ahead, further developments in the space could determine whether or not bitcoin can still recover. It might take another big catalyst to encourage investors to reopen their long positions and have a more positive outlook for bitcoin.
Apart from that, trade talks between China and the US also need to be more positive in order to revive risk appetite and demand for assets like bitcoin. So far, both sides expressed willingness to negotiate but it would still be a long road from here.