Bitcoin Price Key Highlights
- As predicted in the previous article, bitcoin price found resistance at the short-term falling trend line and Fibonacci retracement level.
- Bitcoin price appears to be forming a falling wedge pattern from here, reflecting a bit of hesitation among sellers.
- Price looks ready to make a test of the resistance around $375 and might be due for another bounce.
Bitcoin price is currently trending lower and might be able to resume its slide after testing the nearby resistance levels.
Technical Indicators Signals
The 100 SMA is below the 200 SMA, confirming that the path of least resistance is to the downside. In addition, the 100 SMA lines up with the top of the wedge pattern, adding to its strength as a potential resistance level.
Stochastic is heading north, however, which suggests that buyers are in control of bitcoin price action at the moment. RSI is also on the move up and making its way past middle ground so there might be some bullish pressure left.
Once the oscillators reach the overbought levels and turn lower, bitcoin price might follow suit. This could lead to another test of the wedge support near $360-365 or perhaps a break lower.
If so, bitcoin price could fall to the next potential floor at $300. Note that the wedge pattern spans $360-420 so the drop might amount to $60 or more, depending on how long the bearish momentum persists.
Bitcoin price trends could hinge on the outcome of this week’s top-tier events, which include the NFP release, BOE statement, and RBA statement. No actual policy changes are expected for the time being but any shift to a more dovish stance could spur risk aversion and support the US dollar.
Earlier today, Chinese PMI readings came in mixed, as China’s official manufacturing figure indicated a drop but the Caixin version showed a slight improvement. This is keeping riskier assets like bitcoin afloat against their safe-haven peers so far, with equities also chalking up feeble gains.
Commodity prices and futures are looking on edge, though, which suggests that longer-term declines for bitcoin price might stay in play. However, an upside break from the wedge resistance on a pickup in risk-taking could bring it up to the next area of interest at $400 then onto $465.
Later today, the US core PCE price index is up for release and this could have a strong impact on dollar movement, as the Fed is keeping closer tabs on inflation these days. Also on the docket are personal spending and income reports, which are considered leading indicators.
Prolonged gains might even take bitcoin price to its previous year highs closer to $500, although it’s hard to imagine what market catalyst could spur such a move. For now, short-term moves inside the consolidation pattern could materialize, before price reaches the peak of the formation and is forced to break out. Volatility is expected to pick up around the middle of the week.
Intraday support level – $365
Intraday resistance level – $375
Technical Indicators Settings:
- 100 SMA and 200 SMA
- RSI (14)
- Stochastic (8, 3, 3)
Charts from Bitstamp, courtesy of TradingView