Bitcoin has formed lower highs and higher lows on its daily chart to create a symmetrical triangle formation. Price was rejected on its test of resistance recently and is setting its sights on the bottom.
For now, the 100 SMA is holding as dynamic support, but this moving average is below the longer-term 200 SMA so the path of least resistance is still to the downside. This means that support levels are more likely to break than to hold.
RSI is heading lower to signal that sellers are in control of the game, but the oscillator is nearing oversold levels so a return in bullish pressure may be imminent. If support t $8000 holds, bitcoin could recover to the top of the triangle around $9000.
Bitcoin traders continue to hold out for the next big catalyst that could spur a rally, as the latest rejection on the $10,000 psychological level drew more selling pressure. A move below $8,000 could further spook investors and lead to a drop below the triangle support.
Meanwhile, the dollar shrugged off weak US retail sales data for April as investors focused on the pickup in prices and the positive revisions in the March data. This revived Fed tightening hopes and allowed the US currency to catch gains on higher US bond yields.
Risk-taking remains feeble as geopolitical risks remain, even as the focus has shifted to trade tensions. There have been talks of further friction in NAFTA discussions and potential EU tariffs on steel imports could also keep trade jitters present, thereby weighing on riskier assets like bitcoin.
To top it off, the ongoing investigation and raid into South Korea’s largest cryptocurrency exchange has brought back concerns on regulation and security threats. Altcoin rivals also seem to be drawing the buying interest on more positive developments compared to bitcoin.