BTCUSD is still trending higher on the shorter-term time frames and it looks like bulls are pushing price higher. It spiked up to a high of $792.47 before profit-taking quickly took over and brought it down to the Fib retracement levels.
On the 4-hour chart, it can be seen that the rising trend line is still intact and that a bounce might be due. This rising trend line coincides with the 61.8% Fibonacci retracement level and a former resistance around $750, which might now hold as support.
The 100 SMA is still above the longer-term 200 SMA so the path of least resistance is to the upside. This means that the uptrend is more likely to continue than to reverse. If any of the Fib levels hold as a floor, BTCUSD could resume its climb back up to the swing high or until the $800 handle.
RSI is heading south to show that buyers are taking a break and letting sellers take over from here. Stochastic is also moving lower to indicate that bearish pressure is in play, allowing the correction to materialize.
Economic data from China turned out slightly better than expected, with retail sales posting a larger 10.8% year-over-year gain versus the 10.2% consensus and industrial production also ticking higher. This eases the pressure on the government to add stimulus or engineer yuan devaluation, preventing Chinese investors from dumping their local asset holdings in favor of bitcoin.
Meanwhile, the upcoming FOMC statement is also putting a bit of downside pressure on the dollar as market watchers predict that it could be a “dovish hike” in which policymakers could emphasize that they won’t be tightening again in a long while. Traders are eager to look at the change in the dot plot forecasts to gauge what the Fed has in mind, particularly when it comes to working with the Trump administration.
Cautious remarks from the Fed could continue to drag the dollar across the board, lifting BTCUSD in the process. On the other hand, indications that they’re still open to hiking interest rates again within the next six months or so could keep the US currency supported.
Bitcoin bulls appear to be taking it easy these days as most traders are already starting to book profits before the year comes to a close. This could make it extra challenging for the cryptocurrency to move past the yearly highs or the $800 psychological barrier, unless there is a major catalyst that comes along in the next couple of weeks. Consolidation could be seen from here or a larger correction visible on longer-term charts if profit-taking carries on.