Bitcoin Price Key Highlights
Bitcoin price looks ready to resume the downtrend as the descending trend line keeps holding.Bulls seem to be having trouble sustaining the upside wedge breakout and might give in to bearish pressure.Applying the Fibonacci extension tool shows the next potential downside targets.
Bitcoin price might be ready to resume its selloff as the $6,800 level is proving to be tough resistance.
Technical Indicators Signals
The 100 SMA is safely below the longer-term 200 SMA to suggest that the path of least resistance is to the downside. This means that the selloff is more likely to resume than to reverse.
The 100 SMA also lines up with the trend line to add to its strength as a ceiling, and a move higher could still encounter a roadblock at the 200 SMA dynamic inflection point.
RSI continues to head south so Bitcoin price might follow suit while sellers have the upper hand. Stochastic is also moving lower without even hitting overbought levels, signaling that bears are eager to return.
A continuation of the drop could lead to a move to the 38.2% extension at $6,300 initially then to the swing low near the 50% extension at $6,100. Stronger selling pressure could spur a break of the $6,000 handle onto the 61.8% extension at $5,879 or the 78.6% extension at $5,585. The full extension is near the $5,200 level.
Sentiment in the industry has tossed and turned for the most part of the week, starting off with the BitLicense approval for Square then the Bithumb hack midweek. The Bank of International Settlements also had some negative commentary on cryptocurrencies, which also contributed to investor anxiety.
Apart from that, dips in risk appetite also led to some profit-taking off key technical levels, which explains why the upside barriers are holding. Bitcoin price would need an even stronger bullish catalysts or several ones in order to inspire confidence in the industry once more.