- Bitcoin price recently made a sharp tumble, breaking below an ascending trend line connecting the lows since mid-August.
- Applying the Fib retracement tool on the latest swing high and low shows that the 61.8% level lines up with the broken support.
- Technical indicators are suggesting a potential pickup in bullish momentum.
Bitcoin price could be ready to make a pullback from its recent slide, and the Fib tool shows potential resistance levels.
Technical Indicators Signals
The 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, there’s still a chance for bulls to charge again and possibly spur a retest of the latest highs.
Stochastic is also indicating oversold conditions or that sellers are tired. The oscillator is starting to pull up as well, reflecting a return in buying momentum. Similarly RSI is climbing out of the oversold region and moving north could allow bitcoin to follow suit.
A correction could take bitcoin up to the 61.8% Fib near the $7,000 major psychological level and the broken ascending trend line, which might hold as resistance moving forward. A shallow correction could last until the 38.2% Fib near the 200 SMA dynamic inflection point or the 50% retracement level at the 100 SMA and $6,850 area.
Bitcoin was actually off to a good start for the week thanks to increased coverage on bullish analysts’ forecasts, but the cryptocurrency gave these gains up when it was reported that Goldman Sachs might ditch its plans to offer a bitcoin trading desk. This drop was exacerbated by news of ShapeShift’s new registration requirements and rumors of layoffs and a shutdown in some Kraken operations.
Still, some bulls might be keen on defending nearby support levels as many still expect the SEC to approve bitcoin ETF applications and the rebound to materialize before the end of the year.
Based Blockchain Network