BTCUSD has been trending higher since July last year, moving above an ascending trend line on the daily time frame. Price has made a strong surge this month, topping at $775 and making a similarly large correction lately.
Using the Fib tool on the swing high and low shows that BTCUSD is already testing the 61.8% retracement level, which might be the line in the sand for any correction. However, price could still draw support from the trend line around the area of interest at $500.
As you can see from the chart above, the $400-500 area served as support back in 2014 and resistance in the latter half of 2015 until early this year. This might hold as support moving forward, as it coincides with the 100 SMA. Speaking of moving averages, the 100 SMA is above the 200 SMA so the long-term uptrend could carry on.
RSI is pointing down and heading south so sellers might still be in control of price action for now. Similarly stochastic is heading lower so BTCUSD price might follow suit. Of course, whether a bounce or break takes place depends on the EU referendum.
A vote for the UK to stay in the EU could revive risk appetite and trading in other financial markets such as equities and currencies, driving investors away from bitcoin. This virtual currency has acted as a safe-haven of sorts in the past few weeks, as traders preferred to put funds in an asset that is not so much influenced by governments or central bank policies.
On the other hand, a vote for the UK to exit the EU could bring more uncertainty to the mix, thereby driving up demand for bitcoin once more. However, the official poll results aren’t scheduled to be announced until early Friday so speculative positioning might lead to additional volatility until then.