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Bitcoin Technical Outlook: BTC/USD Not Out of the Woods

Bitcoin Technical Outlook: BTC/USD Not Out of the Woods

Manish Jaradi, Strategist

Bitcoin, BTC/USD - Technical Outlook:

  • Bitcoin has stabilized in recent weeks.
  • Is the BTC/USD rally about to run its course?
  • What is the outlook for BTC/USD and the key levels to watch?

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BITCOIN SHORT-TERM TECHNICAL OUTLOOK - NEUTRAL

While Bitcoin has stabilized in recent weeks, more work needs to be done before concluding that the worst for the cryptocurrency is over.

Since mid-November, this column has been highlighting the possibility of some consolidation/minor rebound following the early-November slide. So far, scenario 1 highlighted appears to be playing out, but to be fair, it is at best stabilization, rather than a reversal of the downtrend. Indeed, the odds are growing that scenario 1 could be nearing completion.

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BTC/USD Weekly Chart

image1.png

Chart Created Using TradingView

BTC/USD has risen above the immediate barrier at the mid-November high of 17170, but it doesn’t appear to be convincing given the bearish evening star candlestick pattern created on the daily chart on Thursday around stronger resistance on a horizontal trendline from June at about 18150-18200 and the 89-day moving average. Rallies since mid-2022 have been capped at the moving average (see chart). Moreover, the rebound in recent weeks has been associated with feeble momentum, raising the risk of a retreat.

BTC/USD Daily Chart

image2.png

Chart Created Using TradingView

If BTC/USD is unable to extend gains in the coming days, it could be a warning sign that the one-month stabilization is over. One of the signposts to watch to conclude that scenario 1 has run its course would be a fall below the December 7 low of 16690. Such a fall would confirm that the upward pressure had faded, raising the odds of a broad range of 15500-18500 developing in the interim. On the bearish side, a decisive break below the November low of 15480 could pave the way toward the 2019 high of 13895.

On the upside, if the current rally has legs, a break above the converged barrier around 18150 is needed which could unfold toward the 5 November high of 21470, near the 200-day moving average.

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--- Written by Manish Jaradi, Strategist for DailyFX.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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