As illustrated in the previous article, BTCUSD found support at the area of interest around the Fib levels and rising trend line then resumed its climb. Price broke above another resistance level, which might now hold as support.
BTCUSD hit the $675 area before showing signs of a pullback. Applying the Fib tool on the latest swing low and high on the 1-hour time frame shows that the 50% level lines up with an area of interest once more, this time around $640. A larger correction could last until the 61.8% Fib, which is closer to the moving averages’ dynamic support areas.
The 100 SMA just crossed above the longer-term 200 SMA to show that the path of least resistance is to the upside and that the uptrend could resume at some point. Stochastic is indicating oversold conditions and is turning higher while RSI is in the oversold area as well, suggesting that bullish momentum could return.
If so, BTCUSD could make its way back up to the previous highs and beyond. On the other hand, a return in selling pressure could lead to a break of these correction areas, with a move below the line in the sand at the 61.8% Fib suggestive of a potential downtrend.
The US GDP report is up for release later in the week and a very strong reading could reinforce dollar demand on stronger Fed rate hike expectations for November or December. Still, bitcoin is enjoying support from the news that the U.K. is pooling resources to boost security in the cryptocurrency’s network, which would be beneficial for companies and customers in the industry.
There aren’t much market catalysts on deck for the week so a bit of consolidation could be seen in the next few days before volatility picks up again during the weekend.
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