BTCUSD is taking a break from its recent climb once more, consolidating in a rising wedge formation just below the $600 handle. Bulls and bears might still be battling it out or taking it easy and waiting for stronger catalysts.
Price is testing the wedge support at the moment and stochastic is suggesting a possible break lower. The oscillator is already on the move south so BTCUSD might follow suit. RSI, on the other hand, is pointing up so a bounce to the wedge resistance might be possible.
Meanwhile, the 100 SMA is safely above the longer-term 200 SMA so the path of least resistance is to the upside. In the event of a downside breakout, the 100 SMA might still hold as dynamic support. The 200 SMA could be the line in the sand for a long-term uptrend pullback, as it lines up with a former resistance around $550.
Lower odds of a June Fed rate hike have dragged the dollar lower, leading BTCUSD to hold on to its gains. Traders could wait for the actual FOMC statement or additional downbeat data from the US economy before pushing for an upside wedge breakout.
Zooming out to longer-term time frames shows that the next potential resistance is at $700 then at $1000-1100, although it would take a really strong catalyst to take BTCUSD up to those levels.
There are no major reports lined up from the US economy for this week so it could be all about sentiment from here. At the moment, commodity prices and Brexit concerns are influencing market risk appetite, and a return in risk aversion could force BTCUSD to return its recent gains.
The levels to watch out for are $585 for the wedge support and $600 for resistance. A break lower could lead to a move to the next floor at $550 while a move higher could put bitcoin on track towards the $700 mark.
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