Bitcoin Price Key Highlights
- Bitcoin price retreated upon testing its yearly highs, allowing the correction to materialize as predicted in the previous post.
- An ascending channel can be seen on the 4-hour bitcoin chart, and price is approaching the floor.
- Technical indicators are showing that the climb is likely to resume rather than reverse.
Bitcoin price is pulling back from its ongoing uptrend, offering bulls a chance to go long at cheaper levels.
Technical Indicators Signals
The 100 SMA is above the longer-term 200 SMA on the 4-hour chart, confirming that the path of least resistance is to the upside. The gap between the moving averages has been more or less maintained, reflecting steady bullish momentum.
The 100 SMA lines up with the channel support around $720 and is currently holding as a dynamic inflection point. The 200 SMA is slightly below the channel support and might be the line in the sand for a near-term correction. After all, the $720 level lines up with a former resistance area as well.
Stochastic is making its way down, which means that the correction is still taking place for now. However, the oscillator is making an upward crossover and appears to be turning higher, indicating the presence of bulls around this area. RSI is on its way south so bitcoin price might follow suit.
Market Events
Dollar strength has gained traction since Yellen’s speech, as her hawkish tone confirmed that a Fed rate hike is in play for December. These upbeat remarks were also highlighted by a few Fed officials who gave speeches last Friday. Apart from that, profit-taking at the record highs and the end of the week weighed on bitcoin price.
This week will be a shortened one, owing to the Thanksgiving holidays in the US. This suggests that profit-taking or reversals might materialize around the middle of the week, particularly if there are major shifts in market sentiment then. So far, the Chinese government’s actions in devaluing the yuan could encourage more investors to hedge their holdings with bitcoin, thereby keeping the cryptocurrency supported in the coming days.
Only the FOMC minutes are up for release from the US economy but, as always, any headlines relating to the incoming Trump administration could have a significant impact on dollar action against bitcoin as well.
Charts from SimpleFX