Bitcoin Price Key Highlights
- Bitcoin price recently formed a long-term reversal pattern then broke below an ascending triangle consolidation pattern, confirming that a downtrend is in the works.
- Price is pulling up from its latest dive, possibly gearing up for a retest of the broken neckline support around $420.
- Technical indicators are showing that a correction is in play for now and that sellers are waiting to short at higher levels.
Bitcoin price might be able to resume its drop upon testing the area of interest and drawing more sellers to the mix.
Support Turned Resistance
The broken support at the $420 neckline coincides with the dynamic resistance around the moving averages. In addition, the short-term 100 SMA is below the longer-term 200 SMA, confirming that the path of least resistance is to the downside. If the 100 SMA moves farther below the 200 SMA, bearish momentum could pick up.
Stochastic is still heading north, which means that buyers are in control for now, but is nearing the overbought zone. Once the oscillator turns down from this area, selling pressure could mount and bitcoin price could resume its drop to the previous lows around $350.