Bitcoin was previously consolidating inside an ascending triangle with its higher lows and resistance at $6,250. Price has made a move below support to indicate that further losses are in the cards.

The chart pattern spans $5,800 to $6,250 so the resulting drop could be of at least the same height. In addition, bitcoin is consolidating in a bearish flag or pennant, which is typically considered a continuation signal.

The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse.

However, RSI is indicating oversold conditions or that sellers are already tired. Pulling up could draw buyers back in and lead to a bounce in bitcoin, possibly until the broken triangle bottom which lines up with the 100 SMA dynamic inflection point.

Stochastic has also reached oversold territory to reflect bearish exhaustion but has yet to pull up to signal a return in buying pressure.

Bitcoin has had a rough week as investors remain cautious about regulatory updates and security threats. Earlier on, Binance had a system upgrade that also spooked traders into thinking that it may have been hacked as well. However, the exchange soon resumed full functionality and updated its risk warning.

South Korea is also reportedly stepping up its regulatory game, possibly following in Japan’s footsteps after the FSA released business improvement requirements to six exchanges last week. In the US, the DOJ announced that it was able to catch 35 criminals and recover millions worth of funds in its undercover operations.

Throughout all this, the US dollar has been able to stay supported owing to risk-off flows and mixed Fed commentary. Data has also been somewhat disappointing since the final Q1 GDP was downgraded on lower personal consumption and export activity.

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