Bitcoin Price Meets Strong Selling Pressure
- Bakkt receive regulatory approval to launch first physically settled Bitcoin futures contracts on September 23rd
- Bitcoin mining difficulty level adjusts above 10 trillion for the first time
- Weekly MACD approaches signal line to the downside
Bitcoin Price Performance
Despite a predominantly bullish outlook last week, bitcoin significantly declined from the 50% retracement level between the December 2017 high and the December 2018 low. The 50% retracement level, priced at $11,623, has been an important level for trading. Trading two weeks ago resulted in price action trading above this level but a failure to close above on the weekly chart was followed up by declines last week with the price dropping into sub-$10k territory. Last week’s decline reversed any appreciation from the week beforehand suggesting it is a seller’s market. The low of last week was priced in at $9,475, a 12% depreciation from where price opened at $11,555. Price managed to recover 8.5% from lows to close at $10,318.
One important development to note is the movements in the lagging momentum indicators, the RSI and MACD. These metrics are often used as a gauge of buyer/seller momentum. The RSI has been recording a series of lower lows and lower highs since forming a double top from late May to early July indicating increasing seller momentum. The MACD has also begun converging to the downside and is approaching a crossover of its signal line to the downside. The MACD crossing its signal line to the downside is widely considered to increase the odds of bearish price movements in the following candles.
Price action continues to trade in a pennant on the daily chart, forming a series of lower highs and higher lows since June. The pennant forming is a continuation pattern with buying pressure expected close to the bottom trendline and selling pressure expected close to the upper trendline.