Bitcoin Prices Pause at Resistance, Retains Bullish Posture
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- Bitcoin prices respond to confluence resistance- pullback to offer favorable long-entries
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BTC/USD Daily Chart
Technical Outlook: Bitcoin prices responded to confluence resistance at the median-line of the broad ascending pitchfork formation we’ve been tracking off the July lows (around ~4410). The pullback is testing interim support at 4212/23 with our broader bullish invalidation level now raised to 3538 where a pair of parallels converge on the 61.8% retracement.
A breach higher from here targets key resistance at 4600/62- a region defined by the record high-day close and the 100% ext of the late-September advance. Subsequent topside objectives eyed at 4921. Bottom line: we’re at risk for a larger pullback if we break this support but the broader outlook remains constructive.
BTC/USD 240min Chart
Notes:A close look at price action shows Bitcoin continuing to trade within the confines of a near-term ascending median-line formation (modified) with the lower parallel highlighting a key support confluence just lower at 4103. We’ll reserve this level as our near-term bullish invalidation level with a breach of the weekly opening range highs targeting 4550 backed by the 100% ext at 4665.
A break below this near-term formation risks a larger pullback with such a scenario eyeing 3887 backed by 3713 & 3538 – both level of interest for exhaustion / long-entries. From a trading standpoint, I’ll be looking to fade weakness into structural support.
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- A summary of IG Client Sentimentshows traders are net-long BTCUSD- the ratio stands at +1.86 (65.1% of traders are long) – bearishreading
- Long positions are 1.3% lower than yesterday and 0.9% lower from last week
- Short positions are 0.8% lower than yesterday but 6.9% higher from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Bitcoin 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 price trend may soon reverse higher despite the fact traders remain net-long.
See how shifts in Bitcoin retail positioning are impacting price trends- Click here to learn more about sentiment!
Relevant Data Releases
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- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex or contact him at firstname.lastname@example.org.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.