BTCUSD is still inside its ascending channel pattern but is making another attempt at breaking below support. Price broke below the bearish flag continuation formation from its previous selloff, indicating that stronger bearish pressure is kicking in.
Stochastic is pointing down so BTCUSD price could follow suit. RSI is also heading south, confirming that sellers are in control of price action. However, the 100 SMA is still above the 200 SMA so there’s a chance that support around $450 might hold.
A bearish candle closing below $450 could be enough to confirm the likely selloff, and a downward crossover could draw more sellers to the mix. The next potential support is located around the $430 area of interest then at $400.
Risk aversion has been present in the markets ever since China printed a downbeat imports reading, leading to concerns about a global slowdown. Equities in the US ended weaker after retail giant Macy’s printed weak earnings data and a downbeat outlook for the sector.
With that, the safe-haven US dollar could continue to draw demand from risk-off flows, leading traders to dump bitcoin in the process. Commodities, however, have shown a rebound recently so higher-yielding assets could still get a boost.
Event risks for the rest of the week include the BOE statement, NZ retail sales report, and US retail sales and PPI figures. Investors could continue to pay close attention to US earnings data to see how overall market sentiment might fare. A return in risk appetite, after all, could spur demand for the higher-yielding bitcoin.
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