Bitcoin has formed lower highs and lower lows to create a bearish channel visible on its 4-hour time frame. The price has broken through the mid-channel area of interest to signal that selling pressure is picking up.

The price has also completed its retest of the area of interest to signal that more sellers are joining in and ready to take bitcoin to the channel bottom around $5,000. The 100 SMA is below the slower-moving 200 SMA to indicate that the path of least resistance is to the downside or that the selloff is more likely to gain traction than to reverse. The 100 SMA also recently held as dynamic resistance and the gap between the indicators is widening to reflect strengthening bearish momentum.

RSI is heading south to indicate that sellers have the upper hand, and the oscillator has some ground to cover before reflecting oversold conditions. Stochastic is also pointing down to show that sellers are in control but is nearing the oversold region to signal exhaustion. Turning back up could mean that buyers are ready to return and push for a test of the channel resistance around $9,000 and the 200 SMA dynamic inflection point.

Cryptocurrencies are still on shaky footing and some of the liquidation is being pinned on improving risk sentiment in general financial markets. Although uncertainties remain, some of the tensions are easing and the interest rate cuts among central banks are also expected to shore up gains for stocks and commodities in the long-run. In turn, this is leading investors to move out of the low volatility environment among altcoins and back to traditional markets.

Still, fundamentals remain bullish as bitcoin approaches its halving in a few months. Slashing the mining rewards in half could potentially lead to double the price, after all, but this could take months or years to happen.

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