BTCUSD Price Technical Analysis – Ready for a Triangle Bounce?

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BTCUSD Price Technical Analysis - Ready for a Triangle Bounce?

BTCUSD has formed higher lows and lower highs, creating a symmetrical triangle pattern on its 1-hour time frame. Price is currently testing the resistance, still deciding whether to make a bounce or a break.

Technical indicators are suggesting that a selloff is likely. The 100 SMA is below the 200 SMA so the path of least resistance is to the downside. In addition these moving averages line up with the top of the triangle and might hold as dynamic resistance levels.

Stochastic is turning down from the overbought zone so sellers are regaining control. RSI is also heading south so BTCUSD could follow suit and move towards support at $445. Also, a bearish divergence can be seen since stochastic made higher highs while price had lower highs.

Stronger selling pressure could spur a break below the triangle support and a longer-term drop for BTCUSD. After all, price came off a sharp selloff and is currently pausing from the slide. Dollar demand could regain traction after commodity price declines weighed on higher-yielding and riskier assets.

Up ahead, the ADP non-farm employment change could have a significant impact on dollar price action, especially if the reading suggests a possible upside surprise for the NFP. A weak result, on the other hand, could remind traders that the Fed is unlikely to hike in June and might lead to more declines for the dollar.

In that case, an upside breakout from the triangle resistance could be seen, taking BTCUSD on track towards testing the previous long-term resistance at $470. Japanese banks are closed today and European banks will be closed tomorrow, creating a low-liquidity environment that might usher in additional volatility.

 

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.