Technical analysis of BTCUSD

Bitcoin has resumed its decline so far this week as the dollar continues to strengthen and inflation-defensive instruments move out of traders’ focus. BTCUSD is currently testing a five-month low below the key psychological area of $30,000. This technical analysis of BTCUSD looks at the daily chart.

High resistance remains the latest high around $64,000, but it’s still unlikely that this zone could be tested anytime soon unless sentiment suddenly and dramatically reverses. Low support might occur around the next main psychological area below, i.e. $20,000, but for the time being a clear break below $30,000 has not been achieved, so today’s closing price might be crucial for direction in the rest of the week.

Technical indicators on BTCUSD D1


Moving averages give a sell signal, with each of the 50, 100 and 200 SMAs above the price. The 50 SMA from Bands has recently completed a death cross of the 200 and did the same with the 100 towards the end of May. Bounces look likely to be capped in the near future by the value area between the 50 and 200 SMAs.

There is currently no indication of saturation from either the slow stochastic or Bollinger Bands. The former at about 27 is closer to oversold than neutral. Buying volume spiked again during yesterday’s fairly large down period, but this in itself isn’t a reliable buy signal.

Price action and Fibonacci


The long tails in the second half of May as price first tested $30,000 might suggest that it’s too early to look for a movement clearly below this support. Equally, the channel since then between this area and $40,000 might also limit any bounce to come around the latter area.

The 61.8% weekly Fibonacci retracement area is still in focus, strengthening $30,000 as a support. To the upside, the 50% zone of the same is also still an important technical reference from which upward momentum might increase if price fails to close significantly below $30,000 before bouncing. Meanwhile current prices below the 61.8% weekly Fibonacci fan mean a weak oversold signal.

Technical analysis of BTCUSD: summary


There’s still no sign from TA of a strategic reversal to the upside for bitcoin, but questions also remain over a push significantly lower from the current area. The key signal sought by traders is a close around $29,000 or below with a large real body. Otherwise, any clear pattern suggesting more losses combined with weaker sentiment would suggest another round of losses. For the moment, sideways movement in the short term still looks like the most favourable scenario.

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