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BTC/USD Daily Chart

Bitcoin Price Chart- Daily Timeframe

Technical Outlook: Last week we noted a break below the monthly opening-range lows in Bitcoin prices with the decline eyeing support targets at “the 50% retracement at 3404 with a more significant support confluence eyed at 3023/97- this region is defined by a host of Fibonacci considerations and converges on the lower parallels heading into next week.”

A low was registered at 2972 before rebounding sharply back into the median-line of the broader ascending pitchfork formation. From here things could get a little dicey and while there’s probably more room on the downside here near-term, the outlook remains constructive while within this formation with broader bullish invalidation now raised to the lower parallel / 100DMA at ~3270s. Key near-term resistance now at 4213 with a breach above the record high-day close at 4600 needed to mark resumption.

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BTC/USD 240min

Bitcoin Price Chart- 240min Timeframe

Notes:A closer look at price action highlights Bitcoin continuing to trading within the confines of a near-term descending median-line formation off the monthly high with prices slipping back below the median-line today in New York. Immediate threat is lower sub-4001 with near-term support targets eyed at 3561 & the 61.8% retracement at 3410- (both areas of interest for possible exhaustion / long-entries).

A breach above 4213 would shift the focus towards initial resistance targets at 4363 and the upper median-line parallel, currently ~4580s. Bottom line: If you’re not already short, I’d be looking for a reaction lower down for possible long-entries. If you are holding shorts, I’d be looking to book a portion / lower protective stops heading into the aforementioned support targets.

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Bitcoin IG Client Sentiment
  • A summary of IG Client Sentimentshows traders are net-long BTCUSD- the ratio stands at +1.78 (64.0% of traders are long) – bearishreading
  • Long positions are 5.1% lower than yesterday and 5.3% lower from last week
  • Short positions are 2.4% lower than yesterday and 15.2% higher from last week.
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Bitcoin (USD) prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Bitcoin (USD) price trend may soon reverse higher despite the fact traders remain net-long.

See how shifts in retail positioning impact price trends- Click here to learn more about sentiment!

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Relevant Data Releases

U.S. Economic Docket

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Other Setups in Play

- Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex or contact him at mboutros@dailyfx.com.