Bitcoin Price Technical Analysis for 11/02/2016 – Buying on the Dips

Bitcoin Price Key Highlights

• Bitcoin price made a strong rally after its bounce off the rising support, as indicated in an earlier article.
• The $740 area is holding as resistance, possibly spurring another potential correction to the ascending trend line support.
• Technical indicators are suggesting that the uptrend could continue but that profit-taking is due.

Bitcoin price is in for another dip to the ascending trend line support, offering an opportunity to buy on dips.

Technical Indicators Signals

The 100 SMA is above the longer-term 200 SMA on this time frame so the path of least resistance is to the upside, which means that the rally could resume at some point. In addition, the 100 SMA coincides with the rising trend line at $720, which might keep losses in check. A larger correction could last until the 200 SMA dynamic support, which served as the last line of defense for bitcoin price bulls.

Stochastic is pointing down, though, indicating that sellers are taking control of price action from here and allowing buyers to take a break. In that case, bearish pressure could be in play, preventing bitcoin price from making any further headway until more bulls join the game.

If selling pressure is strong enough, bears could push for a break below the nearby support levels onto the next potential floor at $660, although it would take a considerably strong market catalyst to trigger this.

Market Events

The US dollar isn’t faring so well against most of its counterparts since there are plenty of event risks lined up. These include the FOMC statement, the NFP release, and the US elections – all of which have the capacity to push the dollar significantly lower in the event of a negative result.

No actual policy changes are expected from the FOMC for this week, as policymakers are likely to stick to their hawkish stance but hold their fire until December. Meanwhile, the odds of a December hike still hinge on the outcome of the NFP, as a disappointing read could cast doubts on tightening, thereby weighing on the dollar against bitcoin price.

Lastly, Clinton’s narrowing lead in the election polls is also weighing on US markets to the benefit of bitcoin price, although some degree of unwinding could take place after the official announcement.

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