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The bitcoin was sold abruptly yesterday, but is now finding support in the underside of its sagging wedge formation. A rebound could lift it for a shot at the nearby resistance area, which aligns with the top of the wedge.
By applying the Fibre retracement tool to the latest high and low swing, the 61.8% level aligns with this area of interest. This also coincides with a previous support area around the value of $ 6,000, where short-term buyers may try to make profits from a rapid rebound.
RSI has reached the oversold region to report that sellers feel exhausted and could use a break. However, the oscillator should turn higher to indicate a return to the bullish phase. The Stochastic has a bit more room to fall before reflecting the conditions of oversold, which means that the sellers may still have enough energy in them.
Bitcoin has plummeted below key support areas on the prevailing uncertainty regarding the Bitcoin Cash hard fork. The digital resource is still in the middle of a "mining war", as the community is struggling to reach a consensus on which version to support. This could lead to the existence of two separate versions of the cryptocurrency, which cause investors to fear that this type of problem may also arise at some point for bitcoins.
With this, it is understandable that concerns have led retail and institutional investors to spend some money off the table and wait for the situation to stabilize. Of course FUD has induced other sellers to join for fear of further drops in the price of bitcoins. Analysts warned that it may take months to cancel this recent slide.
Although the bulls continue to defend these current levels, it is a little worrying that the annual lows are tested, which means that it could be the line in the sand.
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