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Bitcoin Price Key Highlights
- Bitcoin price is trending lower and moving inside a short-term descending channel.
- Price is also forming a head and shoulders pattern on its longer-term time frames.
- These are indications that bitcoin price could be poised for more declines from here, at least according to technical factors.
Bitcoin price continues to sell off and is exhibiting more than a few bearish signals.
Technical Indicators Signals
The 100 SMA has crossed below the longer-term 200 SMA on the 1-hour time frame to confirm that the path of least resistance is to the downside. Price just bounced off its descending channel support and could be due for a correction to the resistance at $2400.
A larger correction could last until the 100 SMA dynamic resistance, which happens to line up with an area of interest or former support. The 200 SMA could be the line in the sand for a pullback around the $2600 level. A move past this area could signal that bulls are getting back in the game.
Stochastic is already starting to pull up without even hitting oversold levels. This hints that buyers are trying to regain control even without seeing oversold conditions. RSI is also heading north so bitcoin price might follow suit.
Market Factors
Bitcoin price has been weighed down by bearish remarks last week and a few industry setbacks, including the Ethereum flash crash and the earlier outages in a couple of top exchanges.
More recently, the return of risk appetite in global financial markets has dampened gains for the cryptocurrency. Traders typically flock to cryptocurrencies in search of higher returns in times of market uncertainty, which is typically accompanied by weakness in traditional holdings like stocks and commodities.
Last week, central bankers have mostly sounded upbeat in their assessment and outlook for their respective economies, bringing risk-on vibes back to the financial markets. This has shored up equities and encouraged traders to put their funds back there to join the rallies, leading them to liquidate bitcoin holdings in turn.
