Bitcoin picked up on more bearish momentum as it approaches the bottom of the descending channel on its daily time frame. This happens to line up with a longer-term area of interest around $6,000-6,150.
The 100 SMA is still below the 200 SMA to indicate that the path of least resistance is to the downside or that support is more likely to break than to hold. In that case, a steeper slide could follow until the next major support levels.
However, RSI is already indicating oversold conditions or exhaustion among sellers. Turning back up could suggest that buyers are taking over and could take price back to the channel top around $8,000-9,000. Stochastic is already pulling up after dipping into the oversold region to also hint that bullish momentum is about to return.
Bitcoin has had a rough month as the lack of major catalysts or positive developments kept a lid on volumes and market interest. In turn, this has proven frustrating for market participants and spurred liquidation, even among other cryptocurrencies.
With that, bitcoin is below the $7,000 mark for the first time in six months, which represents bearish territory. Still, if the key support area holds, it could confirm that buyers are merely waiting to buy on dips.
Risk aversion has also been present in traditional markets, which is also keeping a lid on cryptocurrency gains. Traders are flocking back to the safe-haven holdings like bonds, the dollar, and the lower-yielding Japanese yen as uncertainties related to geopolitical risks remain.
Still, there could be hope for a rebound if traders exit traditional holdings like stocks and commodities and pursue higher returns in alternative assets. Note that bitcoin and other digital assets could enjoy stronger demand in crisis-hit nations like emerging economies or in Hong Kong where political protests are still going on.
Images courtesy of TradingView
