Bitcoin Price Key Highlights
- Bitcoin price appears ready for another selloff as price has formed a head and shoulders pattern on the 1-hour chart.
- Price has yet to break below the neckline around the $14,000 major psychological support.
- The chart pattern is approximately $3,000 tall so the resulting drop could be of the same height.
Bitcoin price is forming yet another selloff signal on a short-term time frame, but technical indicators are looking mixed.
Technical Indicators Signals
The 100 SMA is still above the longer-term 200 SMA on this time frame to suggest that the path of least resistance is to the upside or that the rally could continue. However, the gap between the moving averages has narrowed significantly to show that a downward crossover and and pickup in bearish momentum is imminent.
A break below the neckline could take bitcoin price down to the $10,000-11,000 region next while a bounce could lead to a move up to $15,000 then the highs at $17,000.
Stochastic is pulling up from the oversold region to signal a return in buying momentum while RSI also appears to be slowly heading north as well.
Market Factors
Dollar demand has once again ticked higher on record high Treasury yields, as well as record closes for equity indices. Traders are now looking ahead to a positive earnings season scheduled to start on Friday, and these upbeat expectations are likely to be sustained as tax reform kicks in.
Meanwhile, bitcoin price continues to reel from the hesitation among ETFs facing SEC regulation. A couple of funds withdrew their applications, citing pushback from the financial watchdog. Direxion Shares ETF Trust secretary Angela Brickl wrote:
“On a call with the Staff on January 5, 2018, the Staff expressed concerns regarding the liquidity and valuation of the underlying instruments in which the Fund intends to primarily invest and requested that the Trust withdraw the Amendment until such time as these concerns are resolved. In response to the Staff’s request, the Trust respectfully requests withdrawal of the Amendment.”
This cryptocurrency is also losing ground to its altcoin rivals, as well as equities that are performing better.