Bitcoin Price Key Highlights
- Bitcoin price made a strong breakout from the $500 yearly highs, indicating its potential to keep the bullish run going.
- Zooming out to the longer-term weekly chart shows the next possible resistance levels.
- However, technical indicators are hinting that buyers are feeling exhausted and that a correction might be due.
Bitcoin price made a strong upside breakout on Friday and could be in for a larger climb after a bit of correction.
Technical Indicators Signals
The 100 SMA is above the longer-term 200 SMA on the weekly chart so the path of least resistance is still to the upside. However, the gap between the moving averages is narrowing so a downward crossover might take place soon. If so, sellers could jump in and trigger a pullback from the recent surge.
If that happens, bitcoin price could draw support from the $500 psychological level or the dynamic support at the moving averages around $400. Stochastic is already indicating overbought conditions, which means that buyers are feeling exhausted and might let sellers take over from here.
RSI is still on the move up so there’s buying pressure left. In that case, bitcoin could climb to the next ceiling around $650, which held in mid-2014. Continued bullish pressure could push it up to the peaks at $1,000 in late 2013.
The US dollar was actually pretty well-supported against its counterparts last Friday after Fed Chairperson Yellen confirmed that rate hikes are appropriate in the coming months. She highlighted the continued progress in terms of growth and hiring but cautioned that wage inflation and productivity are lagging.
However, bitcoin took its cue mostly from China’s weaker yuan and government’s capital controls, leading investors from the region to flock to alternative assets like bitcoin and other cryptocurrencies. In addition, analysts have been pointing to signs of network congestion as additional reasons for the surge in buying volume.
For this week, event risks include the US NFP release, ECB statement, and OPEC meetings. Any major shifts in market sentiment could influence BTCUSD price action, especially if investors see the need to load up on their non-fiat holdings.
Charts from SimpleFX
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