Bitcoin: Price Moves Ahead towards $5,600

It is indeed a period of concern for Bitcoin investors and cryptocurrency dealers as the bitcoin does not seem to bounce or break from the descending channel where it has been hovering for quite some time now.

As you know downward moves in the price of the Bitcoin are known as corrections. It is called so because of the trend as far as bitcoin is concerned is usually upwards.  An analysis of the chart on a four-hour time frame indicates that the bitcoin that has been at the bottom of the descending channel is due for a bounce. But the spur would only ensure a correction that is just enough for it to hover In an area just below the channel top of $ 6,200.

If you were to apply the Fibonacci retracement tool,  you can assume that 61.8% is the level that is closest to the resistance. This seems to be closer to the dynamic resistance in the case of moving averages as well.  There are also signals like the SMA being 100 which is lower than the longer-term SMA which is 200 that indicates that the path of least resistance is downward and there are more chances for a selloff to resume rather than reverse. The selling pressure is clearly evident from the widening gap between the moving averages.

Another indicator that signals continuation of the trend is the bearish flag that the current consolidation seems to carry. You could confirm it though when there is a break below the spike that touches the $5200 area.

While the stochastic is pointing down to confirm that the sellers are returning, another indicator that the bears are eager to return is the fact that the oscillators are all set to turn lower without having hit the overbought zone.

The uncertainty on the bitcoin cash hard fork did create rough times for cryptocurrencies at large. it reminded the investors of this impending issue that might arise for other altcoins to at some point resulting in a potentially large loss in value.

Though a handful of analysts count on the opportunities for more buyers to rush in and institutional investments that are expected to flow in the next year would help to unwind losses, most of them believe bitcoin is out of track for rebound this year. It is because it surely would take months to unwind the losses.

Author: Edward Scates

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