Bitcoin price completed its pullback to a descending trend line and Fib level, resuming the drop to the swing low. Price is currently testing the 38.2% Fibonacci extension level at $6500 and could be due for more downside.
In that case, the next support could be at the 50% extension or $6240. Stronger selling pressure could take it down to the 61.8% extension at $5934 or the full extension at $4942.7.
However, the 100 SMA is starting to cross above the longer-term 200 SMA to indicate that a reversal from the downtrend could be due once completed. Still, these moving averages could hold as near-term resistance on another bounce.
Stochastic is pointing down to signal that sellers still have some energy left to push for more losses. However, the oscillator is also nearing oversold conditions to indicate that bearish pressure is weakening.
Risk aversion has returned to the markets once more on worsening trade tensions between the US and China. Neither party is refusing to back down and has announced more sets of higher tariffs on each other over the past 24 hours.
This has led to a wide selloff in stocks and commodities, leading traders to put funds in the safe-haven dollar instead. Apart from that, the upcoming NFP release could also provide some support for the dollar if the actual results turn out stronger than expected. This would spur rate hike hopes for the rest of the year and increase the dollar’s appeal versus bitcoin price.
Another factor weighing on bitcoin price is the ban announced by India’s central bank. The Reserve Bank of India banned banks from allowing people to transfer money from their bank account into wallets, which also weighs on one of the markets of the cryptocurrency.
Along with their monetary policy statement, the RBI said the ban on “dealing with or providing services to any individuals or business entities dealing with or settling virtual currencies” will take effect immediately.