Bitcoin encountered a fresh wave of sellers on news that Goldman Sachs backed off its plans to launch a Bitcoin trading desk. According to a spokesperson from the firm, there are still a lot of steps that need to be taken before a regulated bank can offer cryptocurrencies to its clients.
Price tumbled from the $7,400 area to the $6,400 mark in just a few hours, testing the 38.2% extension based on the latest pullback. Stronger selling pressure could take it down to the next Fib closer to $6,100, then the 61.8% level right in line with the long-term floor of $5,800.
A break below this level could lead to a drop to the 78.6% extension at $5,341.30 or the full extension at $4,777.30. However, the 100 SMA has just recently completed its bullish crossover from the 200 SMA to indicate that bullish momentum might still kick in. Then again, the moving averages have yet to catch up to the latest bars.
RSI is pointing down to signal that sellers are in control of the game, but the oscillator is already dipping into oversold territory to indicate exhaustion. Similarly, stochastic was heading south so Bitcoin could still follow suit, but it is also hitting the oversold zone. Turning back up could allow buyers to return and lead to a bounce back to nearby resistance levels.
Optimism for the SEC ruling on Bitcoin ETF applications has been dampened by news from Goldman Sachs as many were reminded that the regulator might still need to address issues of potential price manipulation and fraud before allowing cryptocurrencies to be more accessible through financial securities.
It didn’t help that the introduction of ShapeShift’s new registration requirements was announced almost a few hours later, worsening the slide. This puts cryptocurrencies on the back foot once more, casting doubts on the narrative that the anticipated rebound for the year is already underway.
Images courtesy of TradingView.