Bitcoin continues to hover around the bottom of its downtrend channel on the 1-hour time frame as bears may be attempting a break lower. If that happens, a steeper decline could be in the works.

The 100 SMA is below the longer-term 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. These moving averages also line up with the Fibonacci retracement levels on the latest swing high and low, adding to their strength as resistance.

In particular, the 100 SMA lines up with the 38.2% level at the $3,567.90 mark and the 50% Fib lines up with the 200 SMA dynamic inflection point at $3,600 and the mid-channel area of interest.

The 61.8% Fib is at $3,639.40 mark which is still below the channel resistance near the $3,700 major psychological level. If any of these hold as resistance, Bitcoin could be due to retest the swing low at $3,450 or lower.

Stochastic is already turning lower to indicate that sellers are returning without even seeing overbought conditions. The oscillator has plenty of room to head south, which means that bearish pressure could stay on for a bit longer. RSI appears to have been on the move up after pulling out of the oversold region but is turning lower again.

Bitcoin is still struggling to hold its footing for the time being as small bounces are quickly followed by profit-taking that spur even stronger declines. Volume remains weak, signaling that there may not be enough buying interest to keep defending the floor, keeping the possibility of a dip back to the previous year lows in play.

It doesn’t help that other coins like Tether and Tron are overtaking their peers in cryptocurrency rankings, convincing traders to transfer some of their holdings to better-performing digital assets.

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