Bitcoin is still trading below its descending trend line visible on the 4-hour and 1-hour time frames. However, there are indications that bearish pressure is slowing and bulls could return.
For one, a bullish divergence can be seen as price made lower lows while stochastic and RSI made higher lows.These oscillators are also pointing up to show that buying pressure could return and possibly trigger a break past the trend line.
However, the 100 SMA is crossing below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. This suggests that the selloff is more likely to resume than to reverse. Price could be ready to resume the drop as it tests the trend line around $6,200 to $6,300 but a candle closing above this could still spur a reversal.
Bitcoin has been on weak footing as it failed to sustain its strong start for the quarter and bust through key technical levels. Negative commentary and a decision by the SEC to delay their ruling on several bitcoin ETF applications also dampened investor sentiment.
Although there are a few updates of institutional interest, these don’t seem enough to overpower the FUD that is prevailing in cryptocurrency industry. It also doesn’t help that risk appetite has weakened due to the turmoil in Turkey and fears of contagion to global financial markets.
Then again, this could eventually prove positive for bitcoin if the same phenomenon as in the aftermath of the Greek debt crisis is in play. At that time, citizens were looking for a better store of value and a means to facilitate transactions. Investors also moved their holdings to alternative assets like cryptocurrencies while dumping stocks and fiat currencies that could be hit by a crisis.
For now, bitcoin is enjoying some gains versus the Turkish lira, although the recent comments from the finance minister led to a rebound and easing contagion fears for the time being.