Bitcoin resumed trading within its well-defined descending triangle formation on the shorter time frames, with price action showing a series of lower highs while maintaining support around the $107K major psychological level.
The cryptocurrency is currently hovering near this support zone at $107,874, which could determine the next significant directional move for BTC/USD. A descending triangle pattern typically suggests bearish momentum building up, as sellers have been gradually pushing price lower with each rally attempt.
However, the horizontal support at $106,925 has proven resilient so far, indicating that buyers are still defending this key psychological level. A decisive break below this support could trigger a measured move lower equivalent to the height of the triangle formation.
Mixed Technical Picture
The moving average setup reveals conflicting signals at current levels. While the 100 SMA (blue line) appears to be trading close to the 200 SMA (red line), the gap between these key indicators has been narrowing significantly. This convergence suggests that momentum is waning and could potentially lead to a bearish crossover if selling pressure intensifies.
Price action is currently testing the dynamic resistance provided by the moving averages, which have been acting as a ceiling for recent rally attempts. The inability to sustain moves above these technical levels reinforces the bearish bias implied by the descending triangle pattern.
The stochastic oscillator is showing signs of oversold conditions in the lower portion of its range, which could provide some short-term relief for bulls. However, the oscillator has room to decline further before reaching extreme oversold levels, suggesting that any bounce from current levels might be limited in scope.
Potential Bitcoin Scenarios
The MACD histogram appears to be showing signs of bearish momentum, with the signal lines potentially preparing for a negative crossover. This technical development would further support the bearish case for Bitcoin in the near term.
Looking ahead, Bitcoin traders should closely monitor the $106,925 support level, as a clean break below this zone with volume confirmation could signal the start of a more substantial correction. On the flip side, a strong bounce from current levels accompanied by a break above the descending triangle resistance would negate the bearish setup and potentially target the previous swing highs.
Bitcoin has struggled to sustain its surge from earlier this month, as the global trade picture remains muddled due to ongoing tariffs negotiations while USD is also on shaky footing because of the Senate’s tax bill vote and a downbeat FOMC meeting minutes. Disappointment over the lack of major regulatory announcements was seen to have been a factor in bitcoin’s latest slump.
The overall cryptocurrency market sentiment and broader risk appetite will likely play crucial roles in determining which scenario unfolds, making it essential for traders to remain vigilant around these critical technical junctures.
