Bitcoin Price Analysis: Wait for a BTC/USD Triangle Break
Bitcoin is still hovering around the bottom of its symmetrical triangle formation on the 4-hour time frame and might be due for another test of support. Technical indicators are showing that bearish pressure is still present after all.
The 100 SMA is below the longer-term 200 SMA on this time frame and is holding as dynamic resistance. This suggests that the path of least resistance is to the downside or that support is more likely to break than to hold.
The triangle pattern spans $6,000 to around $11,000 so the resulting breakout could be of the same height. Stochastic is moving south to reflect the presence of bearish momentum, but the oscillator is also nearing oversold conditions to signal exhaustion among sellers. Meanwhile, RSI is turning lower and has plenty of room to fall before hitting oversold levels.
Another inverse head and shoulders pattern could form if price bounces off support, though, possibly serving as another signal for bulls to charge again. In that case, bitcoin might still gain enough momentum for a move to the triangle top near $10,000.
Although updates from the G20 Summit have been mostly positive, bitcoin is encountering a fresh wave of sellers after Japan’s Financial Services Agency plans to issue a warning against Hong Kong-based cryptocurrency exchange Binance for operating in the country without registration.
This ushered in another set of regulatory jitters as many investors fear that more exchanges could be shut down on increased scrutiny, thereby dampening activity and volumes throughout the industry. The FSA plans to work with police to file criminal charges if Binance fails to halt its Japan operations. Binance CEO Changpeng Zhao tweeted:
“We are in constructive dialog[ue] with Japan FSA, and have not received any mandates,”
A Japanese local media agency also reported that Japan’s National Police Agency has found 149 cases of cryptocurrency hacks last year, for a loss of around $6.3 million involving Ripple.