BTCUSD Price Technical Analysis: Correction Almost Done!

0
631

BTCUSD price is still trending higher even though it has been selling off so far this month. Price is trading inside an ascending channel visible on the 1-hour time frame and has just bounced off the resistance, making its way back down to the bottom.

Applying the Fib tool on the latest swing low and high shows that the 61.8% Fib lines up with a former resistance area around $740-750. This appears to have held as a floor and might be enough to keep losses in check from here.

The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. Also, the 200 SMA is holding as dynamic support at the moment, although a pullback to the channel support closer to $735 is still possible and might be the line in the sand for a correction. A break below that area could mark the start of a downtrend.

BTCUSD Price Technical Analysis: Correction Almost Done!

RSI is on its way up but appears to be turning lower to suggest a return in bearish pressure. Stochastic is also turning lower from the overbought zone to indicate that sellers are in control of BTCUSD price action at the moment and that the correction is still in play for now. Once these oscillators reach the oversold area and turn up, buyers could get back in the game and push for a climb back to the swing high near $800 or higher.

The safe-haven dollar has enjoyed a return in demand owing to the outcome of the Italian referendum, which revived political and fiscal uncertainty in the region. However, fears could be calmed if PM Renzi delays his resignation until the budget is passed, extending a bit of stability for some time. In Greece, there’s talk among Eurogroup leaders of debt restructuring, depending on their assessment of whether or not the country is making progress in achieving its financial and economic reforms.

The dollar is also drawing support from the upcoming FOMC statement, which is highly likely to feature an interest rate hike. This could swing bond yields in favor of the dollar once more, possibly leading to a break lower for BTCUSD if the Fed indicates plans to keep tightening in the next few months. On the other hand, emphasizing that they probably won’t be changing policy in the next few months could force the dollar to retreat.

US central bank officials have mentioned that they’d rather wait for the new US administration’s fiscal plans before deciding if additional tightening is needed. Some have cautioned that monetary and fiscal policy need to be in sync to prevent the economy from overheating, which suggests that fiscal stimulus could be met with monetary tightening.

As for bitcoin, there haven’t been much developments in the cryptocurrency arena these days, except perhaps for the anticipated pickup in activity among Chinese investors as the government moves to restrict foreign investments and yuan gains.

SHARE
Previous articleFind Bitcoin Gifts in Christmas Trees at Dragons.tl
Next articleETHXBT Price Technical Analysis: Sharper Downtrend Underway
With an upbringing rooted in deep ethical values, Yashu Gola knows how to put honesty and dedication into his articles. This young and dynamic financial analyst has done his graduation in IT engineering. His interests in financial writing have once brought him to our digital doorsteps. Since then, he has been an integral part of ForexMinute.com and writes the most captivating news-articles on the foreign exchange industry, cryptocurrencies, and medical marijuana trading.