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Bitcoin Price Key Highlights
- Bitcoin price slumped below its short-term rising wedge after also hitting the resistance on a larger wedge formation.
- Price could set its sights on the long-term support around $5,800 to $6,000 from here.
- Technical indicators are still reflecting the presence of bullish pressure, though.
Bitcoin price made a downside break from a short-term consolidation pattern and is setting its sights back on the long-term floor.
Technical Indicators Signals
The 100 SMA recently crossed above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. This means that the uptrend is more likely to resume than to reverse. However, price has fallen below these moving average dynamic inflection points to signal a pickup in selling pressure.
RSI is pointing down to confirm that selling pressure is in play, but the oscillator has already hit oversold territory to signal exhaustion. It has yet to turn higher in order to indicate a return in bullish momentum.
Similarly stochastic is heading south so bitcoin price could follow suit, but it might also be indicating a bounce as it tests oversold levels. In that case, bitcoin could pull back to the nearby areas of interest at the moving averages or the broken wedge bottom.
Market Factors
The sharp drop is being pinned on reports that Goldman Sachs is backing out of its plans to create a bitcoin trading desk, leading many to doubt that other financial institutions could explore the same route. This also casts doubts on the SEC ruling for bitcoin ETF applications awaiting a decision by the end of the month.
Apart from that, reports that ShapeShift has added registration requirements appears to have accelerated the slide. This could wind up discouraging retail traders looking to make quick profits off the market and is leading some to worry that regulation could be kicking in.
