Bitcoin Price Watch: Revisiting the Downside Targets

 Bitcoin Price Key Highlights

  • Bitcoin price is still on the move down and is testing the first Fib extension level.
  • Stronger selling pressure could take it lower to the next downside targets also shown by the Fib extension tool
  • Technical indicators are suggesting that bears could stay in control of bitcoin price action for a bit longer.

Bitcoin price has completed its correction and is on its way to test the downside targets marked by the Fib extension tool.

Technical Indicators Signals

The 100 SMA is below the longer-term 200 SMA to confirm that the path of least resistance is to the downside or that selling pressure could persist. These moving averages have also held as dynamic resistance on a quick pullback and might continue to keep gains in check.

Price is currently testing the 38.2% extension at $8,000 and a move lower could lead to a test of the 50% extension at $7,316. Stronger selling momentum could take bitcoin price down to the 61.8% extension at $6,694 near the swing low or the 78.6% extension at $5,808. The full extension is located at $4,680.7.

RSI is pointing down to signal that sellers are in control of the game and could take bitcoin price for further losses. Stochstic is also heading south but is dipping into oversold levels to reflect some exhaustion and hint at a possible return in bullish momentum.

BTCUSD Chart from TradingView

If the 38.2% extension is enough to keep losses at bay, bitcoin could still have a shot at forming an inverse head and shoulders pattern. This would be a classic reversal signal, hinting that price is done with the drop and that a longer-term uptrend is in the works. Price has yet to break past the neckline at $10,000 for this to happen though.

It would take a really strong market catalyst to spur such a strong climb, especially since the $10,000 handle has held as a ceiling for quite some time. So far, investors seem more cautious on the rejection at key inflection points.

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