BTCUSD recently made a downside break from its ascending channel, which means that the uptrend is over. Price bounced off the swing low at $678 so a correction to the broken channel support may be in order before bears take control of price action.\
The 50% Fibonacci retracement level seems to be holding as resistance for now, as it also coincides with the dynamic resistance at the moving averages. Speaking of moving averages, the 100 SMA just crossed below the longer-term 200 SMA so the path of least resistance is to the downside.
If you’re waiting for more confirmation, short on a break of the near-term support at $700 since a move below this psychological support level would confirm that sellers are gaining traction. If that happens, price could have enough bearish momentum for a drop to the swing low or much lower until $640-650.
RSI is pointing down to show that sellers are still on top of their game while stochastic is moving south so BTCUSD could follow suit. If bulls suddenly take over or if the oscillators indicate oversold conditions, a bounce up to the 61.8% Fib or the broken channel support closer to $730-740 could be seen.
Economic data from the US came in below expectations on Friday as the NFP reported a 161K gain in hiring versus the projected 174K increase. Still, the jobless rate fell from 5.0% to 4.9% while the average hourly earnings data showed slightly stronger wage pressures with a 0.4% gain versus the projected 0.3% uptick.
For now, US elections news are having a stronger impact on market movements more than anything else, as a Clinton victory would spur demand for US assets and risk-taking while a Trump victory would see a flight to safety. In this case, bitcoin could benefit from the latter scenario as it would discourage traders from putting funds in traditional financial assets.
After this event, the attention should shift to the next event risk for the US dollar, which would be the December FOMC statement. Aside from that, there is one more NFP release before this potential tightening announcement so it might be make or break for speculations. For now, be mindful of how election headlines influence US markets as volatility is set to pick up right around the event.
US markets will be closed for the holiday in observance of Veterans Day on Friday so the shortened trading week should also open up profit-taking moves before the weekend, when volatility usually rises on low liquidity. Until then, near-term resistance is located at $715 and support at $680, with potential downside to $650 and upside to $740.
Zooming out to the daily time frame reveals that bitcoin came in a shade close to the yearly highs before turning lower on news that the Chinese government is considering measures to curb bitcoin trading activity in the domestic economy. This has led to a wave of profit-taking among Chinese investors, particularly in the BTCCNY pair, but has carried on to other bitcoin pairs as well.
Still, the nature of the bitcoin network could make it nearly impossible for authorities to control the amount of cryptocurrency being traded in the domestic economy so industry experts aren’t too worried about this just yet. Then again, a possible bitcoin ban on the entire country could change things up significantly since China is one of the largest markets for bitcoin.