Bitcoin (BTC/USD) Price Technical Analysis for August 6, 2018

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Bitcoin has retreated back to a key area of interest visible on longer-term time frames, still deciding whether to make a bounce or a break. Using the Fib extension tools on the pullback moves shows the next potential upside or downside targets.

First, the upside. If the uptrend resumes from this short-term rising trend line, bitcoin could have a shot at testing the 38.2% extension at $7,826 or the 50% extension at the $8,118 level. Stronger bullish momentum could take it to the 61.8% extension at the swing high or the 78.6% extension at $8,827. The full extension on a bullish move is at $9,357.

Now, the downside. Price is also exhibiting a pullback from the earlier drop since last May and appears to be hovering at the 38.2% extension of the move already. Stronger selling pressure could lead to a break below the trend line and a test of the 50% extension at $6,433 or the 50% extension near the swing low of $5,800. From there, the 78.6% extension is at $5,227 and the full extension is at $4,325.

The 100 SMA is still below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse. However, the gap between the two is narrowing to reflect weakening bearish momentum as well.

RSI is heading lower so bitcoin might follow suit while sellers are in control. Stochastic is also on the move down to indicate that bears have the upper hand, but both oscillators are nearing oversold levels to reflect exhaustion. Turning back up could bring buyers in and allow bitcoin to resume the climb to the upside targets.

Bitcoin was off to a good start for the quarter but has struggled to stay afloat with negative commentary and a few security glitches. Still, it’s worth noting that there continue to be positive developments in the space that might keep propping price up in the long haul.

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