Bitcoin broke below the bottom of its symmetrical triangle consolidation pattern to signal that further losses are in the cards. Price is also trading within a descending channel on the 1-hour time frame and is now aiming for support.
The 100 SMA seems to be staying below the longer-term 200 SMA to indicate that bearish momentum is still in play. Price is trading below both moving averages to confirm this as well.
Bitcoin could be in for a slide that’s the same height as the triangle formation, which spans $3,350 to around $3,550. The support of the descending channel is located around $3,300, which lines up with a potential $200 drop in price.
However, RSI has already reached the oversold region to indicate that sellers are tired and could let buyers take over. The oscillator has yet to turn higher to signal that bullish momentum is about to pick up. Stochastic has some room to head further down before hitting the oversold region, which means that sellers could stay in control for a bit longer.
A pullback could last until the broken triangle bottom around the $3,500 mid-channel area of interest. A strong return in bullish pressure, on the other hand, could take bitcoin all the way up to the channel top at $3,600.
Bitcoin has once again failed to hold its ground even as buyers tried to defend nearby support areas with higher lows. Selling pressure has been much stronger, possibly boosted by news that Quadriga, the largest crypto exchange in Canada, lost access to millions of dollars worth of bitcoin.
Recall that the company’s CEO co-founder died suddenly late last year and was unable to pass recovery keys to computers to successors. Cotten’s widow, Jennifer Robertson, wrote in a filing for creditor protection:
“Quadriga’s inventory of cryptocurrency has become unavailable and some of it may be lost. The normal procedure was that [Gerald Cotten] would move the majority of the coins to cold storage as a way to protect the coins from hacking or other virtual theft.”