Bitcoin is still trending lower inside its descending channel that has been holding on so far this month. Price bounced off the bottom and has pulled up to the top, which is holding as resistance once more.
Should sellers return, bitcoin could find its way back down to the nearby support levels marked by the Fibonacci extension tool. The 38.2% level lines up with the swing low at the $3,200 area while the 61.8% level seems closer to the channel support at $3,100. Stronger selling pressure could take bitcoin down to the 78.6% extension at $3,060 or the full extension at $2,973.9.
The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside or that the selloff is more likely to resume than to reverse. However, price is trading above the 100 SMA dynamic inflection point to signal the presence of bullish pressure. Price could still attempt a break past the channel top and test the 200 SMA dynamic inflection point around $3,450 next.
RSI is on the move down and has a bit of ground to cover before hitting the oversold region. This suggests that sellers could stay in the game and could push for at least a test of the mid-channel area of interest around $3,300. Stochastic has already dipped into the oversold region to signal that sellers are exhausted and buyers might take over.
Bitcoin bulls have found some hope as pro-bitcoin Mick Mulvaney joined Trump’s cabinet as his Chief of Staff. Although not directly involved with regulation or other potential industry developments, it seems that buyers are just hopping on any positive update at the moment. Still, it looks like the gains might be short-lived as buyers are also quick to book gains at nearby resistance levels.
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