Bitcoin has recently broken below its descending triangle support at $2350 and has dipped to the $1800 levels. Price is in the middle of a pullback to this area of interest, which lines up with Fibonacci retracement levels and is close to the moving averages.
The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. Stochastic is heading north but is dipping into overbought levels to signal rally exhaustion. Once the oscillator turns lower, sellers could regain the upper hand and allow the selloff to resume.
RSI still has some room to climb so there may be some gains left. If the broken triangle support holds as resistance, bitcoin could aim for the Fibonacci extension levels as the next support zones. The 50% extension is around the $1800 mark while the full extension is all the way down to $1478.
Weaker dollar performance on expectations of a delay in the next Fed rate hike are currently influencing BTCUSD movement. Apart from that, risk aversion seems to be peeking back in the markets as traders look to the next set of risk factors.
Among these are the upcoming earnings releases from the US, which might show more weakness in business investment and consumer spending. The latest batch of CPI and retail sales figures missed their marks, leading many to think that the economy could be in for a slowdown.
Another factor keeping traders on edge is the return in Brexit uncertainties. Another round of negotiations kicked off this week and leaders set more detailed points for discussion on the table, reminding traders about the potential repercussions of a hard Brexit on global growth.
Lastly, the monetary policy decisions of the ECB and the BOJ are lined up this week while the FOMC will have its meeting next week. Their announcements and any changes in biases could influence bond prices, which in turn affect market sentiment and bitcoin demand. Risk-on flows could discourage traders from putting money in cryptocurrencies and draw them back to stocks and commodities.