BTCUSD Price Technical Analysis: Next Upside Targets

0
1149

BTCUSD seems unstoppable in its climb, as price is trying to push past the yearly highs around the $800 mark. A significant move past this level could leave the path open for a rally to the $1000 handle or onto the record highs at $1200.

The 100 SMA is above the longer-term 200 SMA on the weekly time frame so the path of least resistance is to the upside. The gap between the moving averages has narrowed so bullish pressure has weakened recently, but that was likely due to the pullback around the middle of the year.

RSI is heading up to show that buyers are still in control of price action, but the oscillator is already in the overbought zone. This means that bullish momentum could fade soon and allow another correction to take place. Similarly, stochastic is indicating overbought conditions but has yet to turn lower so there may be some buying pressure left for more gains.

For now, a bit of profit-taking might be limiting bitcoin’s rallies past the $800 level. The end of the year is fast-approaching so traders might be eager to close out their positions in order to crunch their performance numbers for the year. Apart from that, the US dollar is also enjoying strong demand after the FOMC hiked interest rates by 0.25% as expected then followed it up with projections of three more hikes for next year.

161220_btccny

Data from the US was weaker than expected yesterday but Yellen’s optimistic remarks on the labor market appear to have carried more weight. Still, all BTCUSD needs is a long green candle closing past $800 to draw more bulls to the game. On the other hand, if the weekly candle ends up as a doji or spinning top, more investors could have reason to exit their long positions.

On the downside, BTCUSD could find support at the nearby areas of interest at $780 then $750. Any major correction could find a floor until the $500-600 levels, but a break below this area could form a double top and trigger a longer-term reversal.

The lack of any market-moving reports or any major policy changes from China could also keep investors sitting on their hands for the time being. Data from the world’s second largest economy and the biggest bitcoin market has been somewhat better than expected so Chinese traders aren’t seeing much reason to dump local holdings in favor of bitcoin. Also, there’s not much concern about yuan devaluation or offshore investment restrictions for the time being.