Bitcoin bulls could be in for more bad news. Long-term technical indicators suggest the battered digital currency is poised to continue its slump.
A technical analysis of DVAN long-term trend lines shows Bitcoin resuming its recent downward trend. Its baseline indicator, which has been hovering above its algorithm line, does not portend a positive future. As long as the baseline stays above the algorithm line, Bitcoin could continue its dip. But should the algorithm line cross above the baseline, investors might see it as a buy signal and the cryptocurrency could see a rebound.
Before that happens, Bitcoin might retest the US$6,000 level. The digital currency, currently hovering around US$6,200, last crossed US$6,000 in mid-August and hasn’t closed under that price since June. The price of Bitcoin has plunged more than 66 per cent since it hit a record high of US$19,511 in mid-December.
The cryptocurrency space has been riven by a number of issues this year, including wider regulatory scrutiny and a slow adaption of digital tokens as payment systems. The total market capitalization of virtual currencies has fallen drastically this year. Digital tokens have erased more than US$600 billion in market value since January.
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