BTCUSD price has been consolidating inside a symmetrical triangle on its 4-hour time frame but a breakout finally took place. Price dropped below the triangle support to indicate that sellers have taken the upper hand.
However, both stochastic and RSI are indicating oversold conditions so profit-taking might happen, especially ahead of the weekend. This opens the possibility of a pullback to the broken triangle support or at least until the Fib levels from the breakout move.
The 38.2% Fib lines up with the $443.67 level, the 50% Fib lines up with the $446.39 level, and the 61.8% Fib lines up with $449.10. The highest Fib is also near the 200 SMA which typically holds as a dynamic inflection point. The 100 SMA is still around the broken triangle support and might hold as the line in the sand resistance.
The gap between the moving averages is narrowing so there’s a chance that a downward crossover might take place and confirm the potential selloff. The triangle is around $30 tall so the resulting selloff could last by the same amount, possibly taking BTCUSD down to $420 or lower.
The FOMC minutes released earlier this week revealed that several policymakers are optimistic about US economic prospects and believe that a June hike might be possible. While they emphasized that their decision would be data-dependent, some officials maintained their upbeat outlook for hiring and inflation.
In particular, voting member Dudley shifted from his previous dovish stance to acknowledge that the June meeting would be a live one. This could add fresh support for the dollar’s rallies, further weighing on BTCUSD price. There are no major catalysts lined up today, though, and traders might lock in their profits from the earlier short positions to avoid weekend risk.
As the June FOMC meeting approaches, the US dollar could get an additional boost if US data continues to show strong improvements.
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