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Bitcoin is still trending lower inside a descending channel on the 4-hour chart, but there’s some bullish pressure at support. If this continues to keep losses in check, bitcoin could bounce back to the resistance around $7,085.
This lines up with the 61.8% Fibonacci retracement level and the top of the descending channel. The 100 SMA also lines up with the channel top to add to its strength as a ceiling.
Speaking of moving averages, the 100 SMA is still below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse.
Then again, the gap between the moving averages is narrowing to signal a potential upward crossover. This suggests that bearish momentum is slowing and that a return in buying pressure might even be possible.
RSI is turning higher so bitcoin could follow suit while buyers regain the upper hand. A bullish divergence can also be seen since this oscillator made higher lows since yesterday while bitcoin had lower lows.
Stochastic is also pulling out of oversold conditions to show that buyers are taking over while sellers take a break.
Bitcoin is down to its lowest level in four months and the break of several barriers has spooked more investors into liquidating more of their holdings. However, price was able to bounce after the FOMC decision, even as the central bank hiked rates and indicated room for two more hikes later in the year.
Traders continue to fret about the results of the ongoing probe by US regulators into whether or not bitcoin price was manipulated. If evidence suggests plenty of price manipulation, trust in the industry could be further eroded. Some reports suggest that Tether was used to manipulate bitcoin price back in 2017.
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