BTCUSD Technical Analysis: Daily Trend Line Holding!

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BTCUSD has been pulling up from its dive after testing the long-term ascending trend line visible on the daily time frame. This support level lines up with the 100 SMA dynamic inflection, which appears to have kept losses in check.

The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. In other words, the uptrend is more likely to resume than to reverse. The gap between the 100 SMA and 200 SMA is getting wider so buying pressure is getting stronger. Also, the trend line is also close to the 61.8% Fib on the latest swing high and low, which adds to its strength as a floor.

In the event that a larger pullback happens, price could still find a floor at the 200 SMA dynamic support around the $700 level but this would be the line in the sand for the daily uptrend. A break below this region could be enough to confirm that a downtrend is taking place.

RSI is also pulling up from its dive so BTCUSD might follow suit. The oscillator is now pointing higher to show that buyers are trying to regain control of price action. Stochastic has dipped into the oversold area and is also showing signs of pulling up, possibly drawing more buyers to the game. A bit of divergence can be seen since stochastic had level lows while BTCUSD made higher lows since October.

A return in buying pressure could take bitcoin up to the swing high at $1100 if traders are confident that the Chinese government won’t be introducing stricter restrictions on bitcoin activity in the mainland. Authorities are still cracking down on bitcoin exchanges and clients in the country but seem to be having trouble limiting transactions.

A more realistic target could be the $900 area, which has held as a former support level. Traders could wait for their next market clues from here, either triggering another test of the long-term trend line support or pushing for more gains. This could hinge on the outcome of this week’s market movers.

Coming right up is UK Prime Minister May’s speech which could outline the government’s plans for the Brexit, possibly setting the fate of the European region in the near-term. She is expected to emphasize their willingness to give up access to the single market, something that could dampen confidence in the bloc and possibly convince traders to move funds to bitcoin.

Trump’s inauguration by the end of the week could also spur a lot of volatility as dollar traders might scramble to close positions before the actual event. If so, bitcoin price could be ready to take advantage of dollar declines and profit from the pickup in uncertainty. However, be mindful of how the dollar reacted after the US elections and Trump’s victory as a repeat of this phenomenon could be observed.

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With an upbringing rooted in deep ethical values, Yashu Gola knows how to put honesty and dedication into his articles. This young and dynamic financial analyst has done his graduation in IT engineering. His interests in financial writing have once brought him to our digital doorsteps. Since then, he has been an integral part of ForexMinute.com and writes the most captivating news-articles on the foreign exchange industry, cryptocurrencies, and medical marijuana trading.