Technical analysis of BTCUSD

Bitcoin has moved down on the whole this week as its inverse correlation with gold has weakened, the dollar has strengthened and some negativity resulted from this morning’s criticism of bitcoin’s energy inefficiency by the Bank of England. This TA of BTCUSD takes a brief look at the daily chart.

High resistance around the latest high of $64,000 is very unlikely to be tested in the near future. Low support might occur around $29,000, 17 January’s intraday low, so a bounce from this area seems to be possible unless sentiment continues to sour.

Technical indicators on BTCUSD D1


Moving averages give a sell signal, but it’s still not very strong. While price is below all three of the 50, 100 and 200 SMAs and the 50 has death crossed the 100, both of these remain above the 200. The first important resistance from moving averages is the 200-day moving average around $42,800. A break above this might signal a round of gains.

There is currently no signal of saturation from either Bollinger Bands or the slow stochastic, but the latter at around 78 is very close to the overbought zone. The very strong expansion of the deviations from Bands might suggest ongoing losses, but this is not usually a very reliable signal when dealing with cryptocurrencies, dominated as they are by sentiment. High volume around the big drop last month has dissipated for now.

Price action and Fibonacci


Recent price action is fairly consistent with a consolidation: generally long tails for most days suggest reluctance to push much below $30,000 although 19 May briefly saw prices below this psychological area. 13 June’s upward engulfing candle can probably be discounted unless confirmation comes from another pattern or a positive change in sentiment.

The 50% weekly Fibonacci retracement area remains the primary technical reference from Fibo around $35,500. Meanwhile the 38.2% zone looks like an important support in the medium term. To the downside, the 61.8% retracement around $29,500 might strengthen that area as a support. Dynamic support here comes from the 61.8% zone of the weekly Fibo fan,

Technical analysis of BTCUSD: summary


Overall the technical picture for bitcoin is somewhat negative, but there’s no clear sign at the moment of another sharp drop significantly below $30,000. The case for a strategic reversal to the upside in the near future remains weak. However, sentiment is an extremely strong driver in crypto markets, so a significant change or even just a couple of tweets might alter the impression from the chart completely.

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