Bitcoin recently tumbled below the bottom of its falling wedge pattern on the 1-hour time frame to signal that further losses are in the cards. Price is finding support at the $3,400 area, though, so a pullback to the broken support may be in the works.
RSI is already indicating oversold conditions and is starting to turn higher to signal a return in bullish momentum. Similarly stochastic is pulling up from the oversold area to suggest that buyers are taking over while sellers take a break. Both oscillators have a lot of ground to cover before hitting the overbought zone, which means that bullish momentum could stay in play.
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, the selloff is more likely to resume than to reverse and the nearby resistance levels are more likely to hold than to break. The 100 SMA even lines up with the broken wedge bottom to add to its strength as resistance.
Apart from that, the 61.8% Fibonacci retracement level lines up with the broken wedge support to add an extra ceiling. A shallow pullback could already find resistance at the 38.2% Fib at $3,600 or the 50% level at $3,650.
Bitcoin suffered another blow on news of the SEC decision to once again delay its ruling on bitcoin ETF applications. The regulator would then take more comments while mulling its decision on the proposed rule change to list the VanEck/SolidX ETF.
However, this might actually be positive news since it comes after a meeting with the companies’ representatives. The memorandum on their discussions indicated that representatives pointed out how bitcoin ETFs could be of the same framework as that of gold and other commodities, even citing that the traditional assets are more prone to market manipulation compared to bitcoin.