Bitcoin has formed lower highs and lower lows to trade inside a descending channel on the 1-hour time frame. Price is currently testing the bottom and bulls still appear to be defending the support.
A bounce off this level could take bitcoin up to the channel resistance again, and the dynamic resistance at the 50 SMA and 100 SMA could add strength to the ceiling. The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside or that the selloff is more likely to resume than to reverse.
RSI is indicating oversold conditions, though, so sellers might need to take a break and let buyers take over. Stochastic is also in the oversold region to signal that bears are exhausted. Both oscillators might need to start moving higher before buying pressure returns.
Much of the bitcoin price declines are being blamed on FUD (fear, uncertainty, doubt) that usually comes into play in times like these. There has also been a lack of positive news that traders are hoping to get to sustain the earlier rallies.
One factor that’s also keeping gains in check is the SEC decision to delay the ruling on another bitcoin ETF application for September. This has already been reported earlier on but the notice contained more detail, such as 1,300 comments on the proposed rule change to list and trade shares for SolidX and VanEck.
With that, many are worried that bitcoin has yet to bottom out and may reach new lows before making the much-anticipated rebound for the year. Some say that the recovery might not even take place at all.
Market sentiment could stay the main driver of bitcoin price action for the next few days as traders continue to hold out for more catalysts. It has been reported that Goldman Sachs is looking into custody offering for cryptocurrency funds, once again throwing the spotlight on institutional interest, but this failed to keep bitcoin afloat.