Bitcoin broke out of the short-term descending pattern which is an early sign that bulls have started to regain control. Prices have begun to rally again by creating an ascending trendline on the 1-hour chart. The 100 SMA is now beneath the long-term 200 SMA which signals that the path of the last resistance is on the downside. Hence, a selloff is likely to resume than the reverse.
The space between the shifting averages is expanding signalling strengthening selling pressure. Prices are testing the 100-day SMA dynamic inflexion point currently, and another break above could attract more buyers. RSI is moving down from overbought levels which reflects a twist in selling pressure. Stochastic is turning lower, and prices might follow. Should the short-term ascending pattern keep losses in check, prices could resume the climb again.
Was The Reversal Sustained?
BTC/USD is currently trading at 6,589 USD, after a late Thursday high of 6,620 USD. The recovery is fading which indicates that the market will likely resume the downside shift since positive news has only short-term effects. Financial experts believe that the Bitcoin sell-off may have been the result of the expiration of digital currency futures contracts. Spot market volatility may also be a factor as traders are looking to minimise risks.
Bitcoin Technical Analysis
On the short-term, the BTC/USD pair recovered on the 100-SMA at 6,610 USD. Once the resistance is finished, the upside might be extended towards 6,700 USD to the ultimate bullish at 7,000 USD. On the downside, there’s sustainable movement below the 6,500 USD support level which will take us back to 6,483 USD and closely followed by the 50-SMA at 6,476 USD.
Bitcoin has come under pressure in recent weeks due to the ongoing probe into cryptocurrencies by the US Justice Department and financial regulators as well as the Coinrail hack. However, the cryptocurrency found reprieve when the USD sold off after FOMC’s decision as trade war fears began to resurface.