Bitcoin is currently testing the bottom of a shorter-term symmetrical triangle but might be due for a break lower. In that case, price could aim for the very bottom of the descending wedge seen on the daily time frame.
The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, support is more likely to break than to hold. In that case, bitcoin could slide by the same height as the triangle, which spans $5,800 to around $8,400.
RSI is pointing down to show that there’s some selling pressure left before oversold conditions are seen. Stochastic appears to be climbing out of the oversold region to show that bullish pressure is returning, possibly hinting at a bounce back to the top around $6,800.
However, risk aversion has been evident in financial markets these days after the US imposed another set of tariffs on Chinese imports. This is the largest to date at $200 billion at 10%, which will be increased to 25% by the end of the year. Trump has also threatened to slap more tariffs on $267 billion worth of goods if China retaliates, which they said they will.
Although not directly related to cryptocurrencies, the sentiment has carried over to traders’ behavior of dumping their higher-yielding riskier assets in favor of safer ones like gold and the US dollar. Remember that traders are also feeling wary about the SEC ruling on bitcoin ETF applications later this month, so it’s understandable that they’re quick to lighten their exposure.
With that, the ruling could be a make-or-break for bitcoin trends. An approval or a prolonged review period could keep hopes up for the highly-anticipated rebound for this year. Keep in mind that there’s some institutional interest after all and there have been plenty of noteworthy industry developments being overshadowed.