Bitcoin Price Key Highlights
- Bitcoin price recently broke below a short-term ascending trend line visible on the 1-hour chart.
- This could be indicative of a reversal or a larger correction to a nearby support level.
- On the 4-hour time frame, bitcoin price is safely inside its ascending channel pattern.
Bitcoin price broke below a short-term support area but might still resume its climb if it bounces off the ascending channel bottom.
Technical Indicators Signals
The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. In addition, the gap between the moving averages is widening to suggest strengthening bullish pressure. Also, the 100 SMA coincides with the channel support at $1100-1150, which is also a long-term area of interest.
Stochastic is pointing down to show that sellers are in control of bitcoin price action at the moment, possibly taking it all the way down to the channel bottom. A larger correction could last until the 200 SMA dynamic inflection point just slightly below $1100, but this would be the line in the sand for the uptrend.
RSI is also heading south to show that sellers have enough energy to push for losses. Once both oscillators hit the oversold regions and turn higher, buying pressure could return and allow bitcoin price to regain ground back to the channel resistance at $1300 or at least halfway until $1200.
Expectations for the COIN bitcoin ETF approval are still in play but it looks like investors are starting to pare their bullish positions to minimize exposure to event risk. Also, bitcoin has an upcoming code release so it’s understandable that traders are being extra cautious at the moment.
Dollar demand has also gained a lot of traction in the past few days as FOMC rhetoric and U.S. economic data are lining up for a Fed interest rate hike this month. The next event risk is the NFP release on Friday as a downbeat result could unwind these long dollar positions and lead to bitcoin price gains.
Charts from SimpleFX