Bitcoin has formed higher lows and higher highs to trade inside an ascending channel on its 1-hour time frame. Price just bounced off the top and is pulling back to support, which lines up with a few other inflection points.

In particular, the 50% Fib lines up with the channel bottom around the $8,000 major psychological level. Price is still around its 100 SMA dynamic inflection point, but a deeper pullback could take it to the 200 SMA dynamic support near the 200 SMA.

The 100 SMA is still above the longer-term 200 SMA to confirm that the path of least resistance is to the upside or that the rally could still resume. In that case, bitcoin could bounce back to the swing high at $8,500 or to the channel top around $8,750 to $9,000.

RSI is already indicating oversold conditions or that sellers are feeling exhausted, possibly allowing buyers to take over soon. Similarly stochastic is in the oversold territory to signal weakening bearish pressure and a potential return in bullish pressure once the oscillator moves higher. A break below the Fibs, on the other hand, could spur a drop to the swing low and a possible selloff.

Bitcoin’s retreat is being pinned on a number of factors. First is the SEC decision on the bitcoin ETF applications, with some being delayed for September and the one filed by the Winklevoss twins being rejected. Still, hopes are up for the SolidX bitcoin ETF to be approved as the regulator didn’t include this in their announcements yet.

Another factor blamed for the drop is the expiration of CME bitcoin futures this week. Historical performance suggests an average decline of around 7% leading up to the expiry, which appears to have been the case again. CME also noted that they won’t be introducing altcoin futures anytime soon, keeping a lid on gins for other digital assets.

The post Bitcoin (BTC) Price Analysis: Testing a Key Support Level appeared first on Ethereum World News.

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