Bitcoin Price Technical Analysis for 05/09/2018 – Potential Reversal Signal?

Bitcoin Price Key Highlights

  • Bitcoin price could be due for a drop as a double top can be seen on its 4-hour chart.
  • Price has yet to test and break below the neckline around $9,000 to confirm this potential selloff.
  • If so, it could fall by the same height as the formation, which spans $9,000 to $10,000.

Bitcoin price is forming a double top on its 4-hour time frame to signal that bears are ready to jump back in.

Technical Indicators Signals

The 100 SMA is above the longer-term 200 SMA on the 4-hour time frame so the path of least resistance is still to the upside. This suggests that it’s possible for the uptrend to resume at this point.

However, bitcoin price is breaking below the 100 SMA dynamic support to signal a pickup in selling momentum. A break below $9,000 could send it down to $8,000 or until the 200 SMA dynamic inflection point closer to $8,500.

Stochastic is starting to move up from the oversold region but is showing hesitation and is turning back down. This suggests that sellers might still have enough energy to push for more losses. RSI also has some room to fall, so bitcoin price could follow suit.

Market Factors

By the looks of it, bitcoin price is still reeling from negative remarks by Warren Buffet and Bill Gates who cast doubts on the cryptocurrency’s ability to retain its value. To top it off, rising geopolitical tensions on Trump’s decision to exit the Iran deal are also weighing on risk sentiment and demand for bitcoin.

On a more upbeat note, NYSE parent company ICE is slated to launch a bitcoin exchange that could enable its clients to take advantage of the price changes, thereby leading to a boost in liquidity and activity. This platform reportedly aims to offer traders a swap contract that will allow clients to get their hands on Bitcoin the following day.

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