BTCUSD Price Technical Analysis – Short-Term Reversal Signal


BTCUSD Price Technical Analysis - Short-Term Reversal Signal

BTCUSD recently made a sharp drop from a longer-term consolidation pattern, signaling further downside for price. However, a short-term reversal pattern can be seen as price failed in its last two attempts to break below $435, creating a double bottom pattern.

BTCUSD is now testing the neckline of the chart pattern around $445 and an upside breakout could indicate that a short-term rally might take place. The chart pattern is around $10 tall so the resulting climb could last until $455.

Take note, however, that the 100 SMA is below the 200 SMA so the path of least resistance is to the downside. In addition, stochastic is indicating overbought conditions and is turning lower, suggesting a return in selling pressure. RSI is on the move up but is closing in on the overbought area as well.

If the neckline holds as strong resistance, BTCUSD could revisit the previous lows at $435 and even go for a downside break, depending on market sentiment and this week’s catalysts.

Data from the US has been weaker than expected yesterday but FOMC officials have been reiterating that a June hike is still possible. Durable goods orders, initial jobless claims, and the preliminary GDP reading are still up for release from the US this week. Strong data could fuel June hike expectations and lead to another round of gains for the US dollar.

Also, analysts are expecting to see an upward revision in the Q1 GDP from 0.5% to 0.8% to reflect a much faster pace of growth. A higher upgrade could spur a downside break from the BTCUSD range, taking price down to the next support around $400 then onto $380.

On the other hand, downbeat results could remind traders that the June decision is data-dependent and that policymakers might wait until July or later before tightening. This could lead to gains for BTCUSD, possibly even until the longer-term ceiling at $470.

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.