After Tuesday’s sharp gains, bitcoin has dipped in value versus the US dollar throughout Wednesday’s trading, heading into the European market close. The pair is currently trading at 610.000, having consolidated into a tight range following the February 3 boost, and is currently heading for two week range support just shy of 600.00 flat. This level will be the one to watch for a short-term bias, as price action around 600.00 will likely dictate the medium term direction of the cryptocurrency. If price fails to close below it, expect support to hold and initiate a temporary reversal, with an initial target mid-range at 617.35. A close above this level would hint at a continuation of the current range and a move towards channel resistance at 635.235.**relatedarticle**
Conversely, if bullish momentum wanes and price falls from its current levels to close below range support (and the 200-period moving average just above range support) expect further downside. Support come resistance at 583.544 offers up a nice initial target, and beyond that 572.273.
A longer-term look at the pair serves up a different picture that validates an overarching bearish bias. From its now infamous peak back in November 2013, the BTCUSD has formed an almost perfect descending triangle. The pair is currently trading just shy of the triangle’s upper trendline, which on a purely technical basis should exert some downside pressure on the BTCUSD.
The descending triangle is a bearish pattern, hinting at further losses in the pair if the triangle support breaks. Before this happens however, a downside shift towards this support looks likely. An initial medium term target in the BTCUSD therefore would be 513.000. A break below this level would validate the pattern, and offer up an initial target at February 25 lows around 430.330.
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