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Bitcoin Price Key Highlights
- Bitcoin price recently broke below its ascending channel support to signal a downtrend.
- Price has since pulled back to the broken support and completed the retest.
- The Fibonacci extension tool shows the next downside targets from here.
Bitcoin price seems to be caving to bearish pressure once more as it broke below the channel and completed the retest.
Technical Indicators Signals
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. Price has also fallen below the moving averages’ dynamic inflection points to confirm a pickup in selling pressure.
However, RSI looks ready to pull up from oversold conditions to show that sellers are exhausted and ready to let buyers take over. Stochastic is still heading south so bitcoin price might keep following suit, but the oscillator is also dipping in oversold territory.
Sustained selling pressure could take bitcoin price to the next Fib extension level at $8750 or the 78.6% level at $8580. The full extension is located at $8359. A bit of a head and shoulders pattern can also be seen with price already trading below the neckline.
Market Factors
Bitcoin wasn’t off to a strong start for the week as it was dragged down by profit-taking and remarks from Warren Buffet. However, a few positive developments were still reported, such as ICE’s plans to create a bitcoin exchange and another approval for the Winklevoss’ bitcoin plans.
Analysts continue to provide bullish forecasts for bitcoin price as well, with Fundstrat estimating that it could reach $64,000 by next year. For now, it looks like risk sentiment is winning out as investors continue to cash in their positions in favor of the dollar. BTCUSD has been unable to benefit from the selloff in the dollar on weak CPI, suggesting that the pair is moving on different dynamics.
