Bitcoin might be done with its slide as price appears to be forming an inverted head and shoulders pattern. Price is testing the neckline of the formation and a break higher could confirm that a rally is due.
The 100 SMA is below the longer-term 200 SMA, though, so the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse. Price is also finding resistance at the 100 SMA dynamic inflection point for now, and the gap between the indicators is widening to reflect stronger bearish momentum.
RSI is indicating overbought conditions as well, and turning lower could lead to a pickup in selling pressure. Stochastic is still on the move up but also testing overbought levels, and turning lower could lead to a return for bears. In that case, bitcoin could fall back to the lows around $6,000.
Bitcoin was off to a rough start for the week mostly on news that the SEC suspended trading in a couple of crypto-based products, lowering the odds of seeing an approval in bitcoin ETF applications later this month.
The regulator cited confusion among market participants when it came to the market for these cryptocurrencies and their mandate to protect consumers as the reason for the suspension.
On a more positive note for the industry, the Winklevoss scored a victory in getting backing from the New York financial regulator on their fiat-based stablecoin. This may explain the slight bounce in bitcoin over the past few trading sessions, but it has yet to show a bit more momentum before a reversal from the slide is seen.
Over in Canada, a bitcoin fund already received a mutual fund trust status, allowing clients to put their fund units in self-directed registered accounts.