Bitcoin has formed a small symmetrical triangle near its long-term floor.
Bitcoin is still hovering above its long-term support near the $6,000 mark and has consolidated inside a short-term symmetrical triangle. A break below the bottom of the triangle could lead to an actual test of the key support area while a break higher could signal that bulls are returning.
The 100 SMA is below the longer-term 200 SMA on this time frame to indicate that the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse. Also, the 100 SMA appears to be holding as dynamic resistance since it lines up with the top of the triangle.
The gap between the moving averages is also widening to signal strengthening selling pressure. RSI is pointing up to show that there’s some bullish pressure left, but the oscillator is nearing overbought levels to reflect exhaustion. Similarly stochastic is heading higher so bitcoin might follow suit but is also nearing overbought territory.
A break below this key $6,000 region could set off an even longer-term selloff as it would place bitcoin below its lowest levels in a year. This might also indicate that several bulls are giving up on their expected rebound for bitcoin before the year comes to a close.
News that the SEC suspended trading of two crypto-based securities wasn’t the best way to start the week for bitcoin and its peers. This dampens hopes of an approval in bitcoin ETF applications as the regulator could cite similar concerns.
It didn’t help that Ethereum co-founder Vitalik Buterin noted that there is no chance that the cryptocurrency and blockchain space will see “1,000-times growth” again as the industry hits a ceiling.
On less downbeat news, the Winklevoss twins finally scored a victory when their fiat-based stablecoin proposal got an approval from the New York Department of Financial Services.