Bitcoin experienced another sharp move lower but may be inching closer to a near-term support level. Price is still moving within a descending channel on the 1-hour time frame and is closing in on the bottom around $3,450.

The 100 SMA appears to be attempting a bullish crossover to signal that buyers are about to return. Remaining below the 200 SMA, however, could confirm that the path of least resistance is to the downside or that the selloff is more likely to carry on than to reverse.

Stochastic is also heading south to indicate that selling pressure is present, but the oscillator is approaching the oversold region to signal exhaustion. Turning back up could lead buyers to return and push Bitcoin back to the top of the channel at $3,700 or at least halfway there until $3,600.

Volume remains elevated but not strong enough as in the previous spikes. A break below support could be sustained if volume picks up by then. On the other hand, another long spike off the support area could be followed by a slow rally as in the previous week.

Bitcoin investors seem to be running out of optimism to fuel rallies as breaks lower have been more sustained and sharper. This signals that there is still a lot of doubt and uncertainty weighing on the industry and that traders are taking updates with a grain of salt.

Commentary has also been more negative these days, which isn’t too surprising given how bitcoin is hovering close to the previous year lows again. This suggests that bitcoin may be far from bottoming out and that a deeper correction might be due. A break below $3,200 is seen to usher in a longer period of declines before Bitcoin shows any hope of recovering for the year.

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