Bitcoin is still in selloff mode versus the dollar even after the cryptocurrency hit seven-month highs against the Turkish lira this week. Still, many are hopeful that the uncertainty could draw traders further away from stocks and fiat currencies and onto alternative holdings like bitcoin.
On the 4-hour chart, it can be seen that bitcoin is inching close to the longer-term floor around the July lows. A break below this level could expose the cryptocurrency to a sharper decline since moves below key technical levels tend to convince more traders to hit the sell button.
The 100 SMA is crossing below the longer-term 200 SMA to signal that the path of least resistance is to the downside. This indicates that the selloff is more likely to persist than to reverse. Price is also trading beneath a short-term descending trend line connecting the highs since the start of this month.
RSI is pointing down to show that sellers are in control so bitcoin price might also head south from here. Stochastic is also moving lower and has a bit of room before reaching oversold levels, which also indicates that sellers could stay in play. Bullish pressure might return only once the oscillators hit oversold levels and turn back up.
In that case, bitcoin could still attempt a break past the descending trend line, which might be the earliest indication that a reversal is in order. From there, bitcoin has yet to contend with the moving averages’ dynamic inflection points next and several support-turned-resistance zones.
While there’s not much going on in the cryptocurrency world itself, it’s helpful to note that alternative assets like these tend to take advantage of financial troubles and massive currency depreciation like that of Venezuela and more recently, Turkey. After all, citizens are rushing to find a better store of value than the lira and also need a better means of facilitating transactions at this point.
Image courtesy of TradingView
