Selling in Bitcoin is gathering momentum, as it continues to slump towards its critical support at $6,075.04. Though many traders and analysts are forecasting lower levels, we shall take it one level at a time.
Until $6,075.04 breaks, we shall continue to hold our view that the leading digital currency is in a large range. The frequent crisscrossing of the 20-day EMA and the 50-day SMA also supports our view of a range bound action.
However, if the bears break below the $6,075.04 level, we will change our view to bearish. The next support on the downside is the zone between $5,450.86-$5,356.95.
We are also keeping an eye on the RSI. It is already in the oversold territory but this is not a reason in itself to buy because, during panic selling, the RSI can get deeply oversold and remain there for some time.
We suggest traders wait for the BTC/USD pair to stop falling and show a decent rebound before entering fresh long positions.
Long-term investors should not be in a hurry to add below $6,075.04 levels. The next level where they can add is closer to $5,450.
Any attempt to pullback will face resistance at the 20-day EMA and the downtrend line.