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Bitcoin Price Technical Analysis
- Bitcoin price is starting to form a new ascending channel after its previous breakdown.
- The consolidation is noticeably tighter these days, which suggests that price could be gearing up for a strong breakout.
- The US elections would likely have a strong impact on financial market sentiment and dollar price action.
Bitcoin price is stuck in a tighter consolidation pattern, which could set the tone for an even more explosive breakout.
Technical Indicators Signals
The 100 SMA just crossed below the longer-term 200 SMA so the path of least resistance is now to the downside, confirming the earlier signal from the break of the earlier ascending channel. Bitcoin price is currently testing the channel support, which lines up with the 100 SMA dynamic inflection point.
If bulls take over from here, price could make its way back to the top of the channel at the $725 area or at least until the 200 SMA at $715. Stronger bullish momentum could take bitcoin up to the broken support of the previous channel at $730.
Stochastic is moving up to show that buyers are in control for now but that bullish momentum is slowing down. The oscillator is already in the overbought zone and turning lower would confirm a return in selling pressure. In that case, a downside break from the channel support at the $700 major psychological level could be a possibility.
If that happens, bitcoin price could aim for the next support at $675 and a continuous move below this area could find a floor at $650.
Market Events
The US elections are expected to be a huge market catalyst this week and the outcome could set the tone for longer-term bitcoin price action. Polling centers are set to open in a few hours and once the state results start coming in, risk sentiment could spur price swings in either direction.
A decisive Clinton victory is foreseen to be positive for US markets since this would be the scenario with the least amount of uncertainty while a Trump victory or a very close outcome could still keep risk-off moves on the table, possibly favoring bitcoin price.
Charts from SimpleFX
