BTCUSD price had been consolidating inside a symmetrical triangle pattern before making a strong downside break. This signals that price could be in for a stronger selloff, likely lasting until the next major support at $600.
Stochastic is on the move down, confirming that sellers are taking control of BTCUSD price action. RSI is already down in the oversold region and might be ready to turn higher, possibly indicating that buyers could put a fight. In that case, bitcoin price could pull back up to the broken triangle support before heading much lower.
Risk aversion has still been present in the financial markets but instead of propping up the bitcoin, it has led traders to flock back to the safe-haven US dollar. Data from the US economy has been mostly stronger than expected, with leading jobs indicators suggesting a potential upside surprise for the NFP.
Analysts are expecting to see a 174K increase in hiring, much higher than the previous 38K rise in May. In the minutes of their latest meeting, FOMC policymakers noted that they’d rather wait for more jobs figures before deciding to make policy adjustments. There’s a good chance for an upside surprise in the actual report since leading jobs indicators have been beating expectations.
Still, uncertainty in the European markets could keep bitcoin price propped up as more UK property funds have been refusing client withdrawals. This could keep more capital frozen in the financial sector, spurring fears of contagion in the region. In addition, rising debt levels in China could lead investors to put more funds in alternative currencies like bitcoin.
If you’re bullish on this pair, it might be better to wait for a test of a major support zone instead of trying to catch a falling knife, as this sharp drop below the consolidation support reflects a surge in bearish momentum.