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Previously, the bitcoin had a higher trend within a wedge pattern, but has since dropped lower to signal that the sellers are not quite done yet. The wedge covers $ 3,700 to about $ 4,200 so the resulting decline could be at least the same size.
The 100 SMAs have exceeded the 200 long-term SMA to indicate that the path of least resistance is downward. In other words, the selloff is more likely to get traction from here. The price has dropped about $ 300 so far and may still have room to go further south.
However, RSI is already in the oversold region and is turning higher to signal that sellers are exhausted and could let buyers take over. If this is the case, a withdrawal of resistance levels in the vicinity may be underway, probably up to the bottom of the broken wedge at $ 4,000-4,050.
Stochastic is also in the oversold region to reflect the exhaustion between sellers. The oscillator could turn higher to also reflect a return to bullish pressure.
The recent sharp decline was blocked by a drop in sentiment, even though the cryptocurrency market had a mostly positive start for the year. Based on the sentiment traced by TheTIE.io, the drop in the time sentiment at around 3:45 pm yesterday was followed by a prolonged stay in negative territory. Even breaking below the key barrier of $ 4000 has attracted more sellers to return.
However, some analysts continue to argue that this is only a short-term correction that could lead buyers to rise to better levels. After all, expectations for institutional investments are still very intact and traders may be looking for price offers.
Another factor accused of this decline is the recent 51% attack on ETC, which reminded market observers of the vulnerabilities of the sector. This apparently led to a rewriting of the blockchain and double spending, which could also affect other currencies at some point.
