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Bitcoin Price Key Highlights
- Bitcoin price was on a steady climb when it suddenly made a sharp selloff close to $1000.
- Price quickly recovered from this drop and resumed trading back to its previous levels.
- This suggests that bullish pressure is very strong and that buyers are simply waiting for cheaper levels to load up on their long positions.
Bitcoin price made a quick spike down but the uptrend remains intact as bulls look eager to defend the floor.
Technical Indicators Signals
The 100 SMA is above the longer-term 200 SMA so the path of least resistance is still to the upside. In addition, the 200 SMA held as dynamic support on the spike down, signaling that buying pressure remains in play. Price is now testing the recent highs but the gap between the moving averages is narrowing so a downward crossover and return in selling pressure might be imminent.
Stochastic is indicating overbought conditions, which means that buyers must be feeling exhausted and ready to book profits. Sellers could take advantage of this and push for a larger correction from the rally. RSI is still on the move up, which means that there’s still some upside momentum left, possibly enough for a break past the $1100 highs.
Market Events
As warned in earlier articles, bitcoin price is extra sensitive to regulatory updates from China and this was the case in the latest dip. News outlets indicated that authorities have held a closed-door meeting with bitcoin exchanges in China, prompting fears of additional restrictions that could curb trading activity. Prior to this, several firms already introduced higher transactions costs on bitcoin trades and ceased offering margin accounts to help clients manage risk.
This led to massive profit-taking in current long positions as investors feared that another sharp tumble is due. According to people familiar with the matter, money laundering is one of the big issues to be discussed. Note that the Chinese market represents the biggest chunk of traders and miners in the industry so the outcome of the meeting and other succeeding moves by regulators in the country could have big effects on price action.
Charts from SimpleFX
