Bitcoin is still trading inside its ascending channel on the 1-hour chart and is about to test support. This lines up with the $6,600 major psychological level, former resistance, and the 100 SMA dynamic inflection point.
Speaking of moving averages, the 100 SMA is still above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, the uptrend is more likely to resume than to reverse. The 200 SMA is just slightly below the channel bottom to add another floor.
If support holds, bitcoin could rally to the 38.2% extension and short-term area of interest around $6,725. The 50% extension is in line with the mid-channel area of interest and could also hold as an upside target. Stronger bullish momentum could take it up to the 61.8% extension close to $6,800 or the 78.6% extension at $6,860. The full extension is around the channel resistance at $6,931.40.
However, the gap between the moving averages is narrowing to reflect slowing bullish pressure. RSI is indicating oversold conditions and starting to pull up, though, so a return in buying momentum could be due. Stochastic is still moving south so bitcoin might follow suit, but the oscillator is also approaching oversold levels.
Bitcoin took some hits after three well-known American economists Joseph Stiglitz, Kenneth Rogoff, and Nouriel Roubini talked about how cryptocurrency could fail. According to Stiglitz:
“You cannot have a means of payment that is based on secrecy when you’re trying to create a transparent banking system. If you open up a hole like bitcoin, then all the nefarious activity will go through that hole, and no government can allow that.”
Meanwhile Rogoff talked about how regulation could lead to declines and said:
“Bitcoin could easily be worth just $100 in 10 years. People in power will move to regulate anonymous transactions. That you can be sure of.”
Lastly, Roubini cited:
“For bitcoin to be a currency it has to be a unit of account, a means of payment, and a stable store of value. It is none of these. Bitcoin is not even accepted at Bitcoin conferences, and how can something that falls 20% one day and then rises 20% the next be a stable store of value.”