Bitcoin Price Analysis for 02/06/2017 – Ready to Bounce Again!

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Bitcoin Price Key Highlights

• Bitcoin price sold off in the past few hours as profit-taking took place off the near-term resistance.
• Price is still trading safely inside an ascending channel visible on the 1-hour chart and is currently testing support.
• A bounce off this support area could take bitcoin price back up to the channel resistance at $1100.

Bitcoin price could be ready to resume its rally now that price is testing a support area seen on the short-term chart.

Technical Indicators Signals

The 100 SMA is above the longer-term 200 SMA on this chart so the path of least resistance is to the upside. In addition, the gap between the moving averages is getting wider, which means that bullish momentum is picking up. Also, the 100 SMA is close to the channel support at $1055, adding to its strength as a floor.

A break below the channel support could spur a test of the next area of interest at the $1000 major psychological level which is close to the 200 SMA dynamic support. A selloff below that area could mark the start of a longer-term drop.

Stochastic is pointing up to confirm that buyers are taking control of bitcoin price action. RSI is also heading north so bitcoin could follow suit. However, once both oscillators reach the overbought zone and turn lower, selling pressure could persist.

Market Events

The US dollar advanced upon seeing stronger than expected NFP data, underscoring the Fed’s plan to hike interest rates three times this year. However, the US currency gave back some of its recent gains as risk appetite remained in play, driving up demand for stocks and higher-yielding assets like bitcoin.

The latest in Washington confirms that Trump is set to follow through on his financial deregulation promises, which is likely to be positive for Wall Street and bitcoin activity. For now, Chinese bitcoin regulation news has taken the back seat as investors renew their appetite for the cryptocurrency.

Charts from SimpleFX