US dollar weakened against a basket of major currencies, including Bitcoin, following the release of Fed meeting minutes which completely ruled out a June rate hike. Consequently, bearish positions were liquidated which led to a price advance to $234.39 – in close proximity to the strong resistance zone of $236-238.
The 240-minute BTC/USD price chart reveals that the cryptocurrency will face strong supply pressures on further increments in price.
Bitcoin Chart Structure – Bitcoin has bounced off after consolidating near $230.80 and is now trying to break free from the lower-top, lower-bottom structure. But with no trigger in sight, there is a high probability that Bitcoin will disappoint the investors.
Fibonacci Retracements – As can be seen from the chart above, Bitcoin’s recent low of $230.86 completely coincides with the 50% Fibonacci retracement of the entire rally starting from 27th April to 9th May. A 50% retracement is a strong support level for the underlying security. The 38.2% retracement level of $234.68 now acts as a near-term roof on the cryptocurrency. A breakout from either of these levels is expected to accelerate momentum in that direction.
Moving Average Convergence Divergence – On a positive note, the MACD indicator has crossed the Signal Line on the upside, giving the value of 0.4352 to the Histogram. MACD is currently on an upward course and reads a value of -0.6251.
Relative Strength Index – The recent gains in price should be watched cautiously as strength has failed to take-off. The latest RSI indicator reads 49.0767.
There are still aren’t enough convincing signals to initiate a buy call on Bitcoin; the chart structure remains fairly weak and the technical indicators paint a mixed picture. Wait for a close above the mentioned resistance levels before entering the counter. Light short positions can be considered on further appreciation in price.