Bitcoin Price Analysis: BTC/USD Aiming for $2,000?
Bitcoin is gaining bearish momentum since its downside break from a falling wedge pattern. Price appears to be forming a descending channel on its daily time frame and is setting its sights on the very bottom.
For now, Bitcoin is hovering around support at the mid-channel area of interest, but it looks prime for a break lower. The 100 SMA is below the longer-term 200 SMA after all, so the path of least resistance is to the downside. This means that the downtrend is more likely to gain traction than to reverse. The 100 SMA also lines up with the channel top to add to its strength as a ceiling in the event of a pullback.
Stochastic is on the move down but already dipping into the oversold region. This suggests that sellers are starting to feel exhausted and may take a break soon. If the oscillator starts turning higher, bulls could be drawn back in to defend support areas. RSI is also in the oversold territory to reflect bearish exhaustion but has yet to pull up in order to signal a return in bullish pressure.
Bitcoin has had another rough day as it confirmed a bearish continuation pattern to draw more selling pressure in. There appears to be no catalyst in sight that might trigger a big bounce, unless a large position is able to stem the declines.
Liquidity is expected to be thinner as the Thanksgiving holidays approach, and it seems likely that traders could continue to unwind their Bitcoin positions while this selloff seems to have no bottom yet. Note that risk aversion is also present in general financial markets, which suggests that investors are in no mood to take on riskier holdings.
The recent selloff is seen to have spurred from the mining war resulting from the Bitcoin Cash hard fork, fueled by the SEC crackdown on ICOs, and weakening expectations of institutional investment even next year.
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