Bitcoin Price Key Highlights
- Bitcoin price recently broke below the ascending channel support, signaling that a reversal from the uptrend is about to take place.
- Price bounced off the $660 area and appears to be making a correction from here.
- Bitcoin could retest the broken support around the $670-675 levels before resuming its slide.
Bitcoin price looks ready for a selloff but a quick correction from the breakdown might take place first, giving bears a better entry point.
Technical Indicators Signals
The 100 SMA is still above the longer-term 200 SMA for now so the path of least resistance is to the upside. In that case, bitcoin price could still find enough bullish momentum to climb back above the channel support and resume its uptrend.
However, stochastic is already making its way down from the overbought region, indicating a pickup in selling pressure. This confirms that sellers are gaining traction and have enough energy to push for more declines, possibly until the next area of interest at $650 then onto $600.
For now, price is finding a bit of support at the dynamic inflection level at the 200 SMA. If the 100 SMA continues to hold as dynamic resistance, more bears could join the fold and increase the downside pressure.
Market Events
Dollar demand has returned recently, buoyed by positive US earnings releases and a bit of risk aversion in global markets. Commodity prices have been sliding, led mostly by crude oil, which is dragging down higher-yielding assets like bitcoin in the process.
Also, the lack of resolve when it comes to central banks doling out more stimulus has eased the uncertainty in the financial markets. In yesterday’s European Central Bank Statement, Governor Draghi reassured that the euro zone has weathered the Brexit and that downbeat forecasts should be taken with caution. This reflected a less dovish stance than expected, reducing fears of a sharp shock in Europe and a global economic slowdown.
There’s not much in the way of top-tier releases for today, which opens up the possibility of profit-taking in these recent moves. Bitcoin price has moved mostly one way throughout the week so a bounce off this selloff could be possible.
Charts from SimpleFX