A New Leg Lower For BTC/USD?

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Bitcoin, BTC/USD – Technical Outlook:

  • Bitcoin has fallen under key technical assist.
  • Has it resumed its medium-term weak spot?
  • What is the outlook for BTC/USD and the important thing ranges to look at?

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BITCOIN SHORT-TERM TECHNICAL OUTLOOK – NEUTRAL

Bitcoin has fallen under the June low of 17590 following final week’s plunge. However, it could be too quickly to conclude that cryptocurrencies have resumed their medium-term weak spot.

BTC/USD has pulled again from the highest finish of an upward-sloping channel from September, coinciding with the 89-day shifting common (see Daily chart). This isn’t stunning given the rebounds in August and September have been capped by the shifting common. In the method, nevertheless, BTC/USD has not solely damaged under assist on the 3 November low of 20040, nevertheless it has additionally fallen under the June low (the earlier replace had highlighted the chance of a retest of the June low of 17590.

BTC/USD Weekly Chart

Chart Created Using TradingView

While the autumn to a brand new two-year low is important, by itself, it is probably not enough to conclude renewed bearishness for 2 causes. BTC/USD’s losses have stalled in current days following the large drop final week. A new downtrend is often related to a market making new lows, and the dearth of it, a minimum of for now, leaves open the faint risk of a false break decrease.

Secondly, momentum on the weekly chart hasn’t made a brand new low although the spot fell under its June low. Momentum is indicative of power and when assist ranges are damaged on stronger draw back momentum, it typically signifies extra decline in value. The 14-week Relative Strength Index is now above its June low – suggesting constructive momentum divergence (a brand new low in value related to the next low in momentum).

BTC/USD Daily Chart

image2.png

Chart Created Using TradingView

Put collectively, this might be a part of a broader base-building course of in BTC/USD, which is related to frequent retests of the lows and excessive volatility across the lows. But for this view to carry, BTC/USD must, on the very least, break above rapid resistance at Thursday’s excessive of 18200. Any break above 18200 may deliver into play the 5 November excessive of 21470.

On the draw back, if BTC/USD closes this week under final week’s low, it might deliver into focus the 2019 excessive of 13895. While not unlikely, this might be a low chance occasion (Scenario 2 within the chart). In comparability, Scenario 1 seems to be a comparatively larger chance final result.

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— Written by Manish Jaradi, Strategist for DailyFX.com





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