Bitcoin (BTC) Price Analysis: Wedge Support Test

Bitcoin broke below a short-term consolidation pattern and is making its way down to test the bottom of the falling wedge on its daily time frame. Another break lower could expose this cryptocurrency to a steep free fall.

But if bulls defend the floor like they usually do, price could recover to the top of the wedge around $6,000 or at least until the areas of interest nearby. The 100 SMA is below the longer-term 200 SMA, though, so the path of least resistance is to the downside. In other words, support is more likely to break than to hold. Then again, the gap between the indicators is narrowing to reflect slowing selling pressure.

In addition, stochastic is indicating oversold conditions or that sellers are tired. Allowing buyers to take over could keep support in play and a bounce possible. The oscillator would have to pull up from the oversold area to confirm this though. RSI is also in the oversold region and appears to be bottoming out, signaling intention to head north and…