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Bitcoin Price Technical Analysis
- Bitcoin price is currently testing an area of interest and might be due for a bounce.
- The broken resistance around $715 is holding as support for the time being.
- Technical inflection points are also lining up with this area of interest.
Bitcoin price pulled back from its recent rally and is finding support at a former resistance level.
Technical Indicators Signals
The 100 SMA just crossed above the longer-term 200 SMA so the path of least resistance is to the upside. In addition these moving averages coincide with the former resistance around $715, adding to its strength as a floor. A bounce off this level could lead to a climb back up to the highs at $735 and beyond.
Stochastic appears ready to turn lower after briefly hitting the overbought zone, possibly indicating a return in selling pressure. In that case, bears could still take bitcoin price back below the floor and onto the next support around $695-700. Stronger selling pressure could bring it down to the $680 area.
Market Events
Traders are flocking back to the US dollar after its initial reaction to the US election results. Right now, the mindset is that a Trump presidency might not do as much harm to the economy as previously anticipated since the president-elect gave a relatively respectable victory speech.
Bitcoin price also returned some of its gains to the dollar when Fed officials reiterated that the chances of a December hike haven’t changed much. Analysts estimate an 80-85% likelihood of seeing the FOMC tighten monetary policy before the end of the year, especially since data from the US economy has been stable.
A bit of downside pressure on bitcoin price from China remains, as investors remain wary that the government could impose restrictions on cryptocurrency trading in the mainland. Profit-taking from the post-election bitcoin rally is also in play for now as traders are trying to move their funds back to US stock markets, which have been gaining ground so far. Still, any signs of a return in risk aversion and market uncertainty could draw investors back to bitcoin.
Charts from SimpleFX
