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Bitcoin suffered another sharp selloff from its earlier consolidation but is finding support at the bottom of the symmetrical triangle on its 4-hour chart. Price could be due for a bounce to the top of the triangle around $6,400 again.
However, the 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, support is more likely to break than to hold. If that happens, price could slide by the same height as the triangle pattern, which spans $6,200 to $6,800. In addition, the moving averages line up with the triangle top to add to its strength as a ceiling.
Stochastic is pointing down also to show that sellers have the upper hand, but the oscillator is already dipping into the oversold region to show that bears are tired. If buyers take over, support at $6,250 might hold and spur another move to the top. RSI is already dipping into the oversold region as well, so buyers might be ready to take over from here.
The recent tumble is being blamed on the sudden shutdown in Canadian exchange MapleChange. The company tweeted that a software “bug” had allowed all of the 913 bitcoin were stolen. It also assured clients that investigations are ongoing but warned it would be unable to make refunds. Soon after, the company deleted its social media accounts and took its website offline.
With that, security concerns came back to haunt the cryptocurrency markets, right around the time when it appeared to be turning a corner in terms of institutional investments and regulation. Some worry that these risks could prevent the SEC from giving the green light on bitcoin ETF applications and might impose additional restrictions on other instruments like bitcoin futures.
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