BTCUSD Price Technical Analysis – Correction Completed, Extension Extended!

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BTCUSD price bounced off the area of interest highlighted in an earlier article and proceeded to climb to its Fib extension levels. This indicates that bullish pressure is very strong at the moment and could continue to lift the cryptocurrency to the next ceiling at $700.

The 100 SMA is above the longer-term 200 SMA so the path of least resistance is still to the upside, although profit-taking opportunities are in play. The gap between the moving averages is widening so bullish momentum is getting stronger.

However, stochastic is already in the oversold area so buyers could take a break and let sellers take over from here. RSI is also indicating oversold conditions and is turning lower to suggest a return in bearish pressure. In that case, a quick pullback to the nearby support zones, possibly at the $675 area or as low as $655, could materialize.

In any case, the moving averages are expected to hold as dynamic support zones and keep further losses in check. The 200 SMA could serve as the line in the sand for this uptrend, as a break below it could mark the start of a reversal.

Event risks for the remainder of the week include the US GDP release for Q3, as this advanced reading would provide the first glimpse as to how the economy fared overall in the period. A stronger 2.5% growth figure is eyed compared to the earlier expansion, likely to reinforce dollar strength, while weak data could spark losses.

Volatility is expected to pickup leading to the weekend as usual, perhaps with traders booking profits after the US GDP release and ahead of the NFP report due next week. Keep in mind that developments in the bitcoin industry have been positive so the crytpocurrency does have considerable support.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com
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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.