Bitcoin Price Key Highlights
- Bitcoin price broke above the neckline of the short-term double bottom formation illustrated in the previous article.
- Price has climbed to the $580 area since and is testing the support turned resistance level.
- Additional resistance is located around technical inflection points so a return in bearish pressure could be due.
Bitcoin price enjoyed a strong rally recently but could be ready to resume its slide soon if this area of interest holds.
Technical Indicators Signals
The 100 SMA is below the longer-term 200 SMA, confirming that the path of least resistance is still to the downside. In addition, bitcoin price is testing resistance at the 200 SMA dynamic inflection point, which might be enough to keep gains in check. If so, bitcoin could slide back to the previous lows around $560-565.
Stochastic is already indicating overbought conditions, also confirming that bears are about to take control of price action once more. If bulls put up a strong fight though, a move up to the next resistance around $590 could be in the cards.
Market Events
The FOMC meeting minutes could serve as a strong catalyst for dollar price action against bitcoin today, as the speeches from Fed officials earlier this week showed that traders are watching rate hike odds very closely. According to FOMC official Dudley, a September hike could still be a possibility since the economy is nearing its inflation targets and stronger growth could be seen in this latter half of the year.
Instead of boosting the dollar against bitcoin price, this resulted to sharp gains for the cryptocurrency as equities fell. Investors appear to be searching for higher yields in other assets but might be forced to put their money back in the U.S. dollar if the FOMC minutes confirm that at least one rate hike is still possible before the end of this year.
On the virtual currency front, reports that California plans to delay its bitcoin legislation has also given the cryptocurrency a boost, allowing startups and companies to thrive in a less restrictive environment for the time being.