Bitcoin price is up roughly 4% in the past 24 hours but is still trending down.
Bitcoin is trading below a descending trend line connecting the highs of price action since the start of the month. Price is currently testing this falling resistance, which lines up with the 50% Fibonacci retracement level.
Holding as resistance could push bitcoin price back to the swing low at $6,100 or lower. The 100 SMA is still below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. This simply means that the downtrend is more likely to resume than to reverse.
The gap between the moving averages has been maintained to signal consistent selling pressure. RSI is also turning down from the overbought region to signal a return in bearish momentum. Stochastic has just reached overbought territory to signal that buyers are tired and sellers could take over once the oscillator moves down.
Still, a break past the trend line could lead to a test of the 61.8% Fib at $6,800 next then a move to the 200 SMA dynamic resistance just below the swing high at $7,177. Sustained gains past these levels could confirm that a reversal is taking place.
Bitcoin’s slide is being blamed on the SEC decision to delay its ruling for the VanEck/SolidX bitcoin ETF application. The regulator has until the end of September to accept comments and decide on the proposed rule change to have these securities listed.
With that, markets could be kept waiting for much longer, preventing any strong moves or reversals from happening unless there are signs that approval is in order. It doesn’t help that risk-off flows are seen in the financial markets owing to the trade spat between the US and China, weighing on riskier assets like bitcoin.
The dollar will take its cues from the CPI report due today but it has previously drawn support from hawkish remarks by Fed official Evans.