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- Bitcoin prices breakout- Near-term resistance to offer entries on a pullback.
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BTC/USD Daily Chart
Technical Outlook: Bitcoin broke though downslope resistance early in the month with the subsequent rally taking prices back above the record high-day close at 4600. The focus remains weighted to the topside while above this threshold (note the median-line) with a breach above the record high at 4979 needed to fuel the next leg higher. Subsequent resistance targets are eyed at 5200 & 5375. Broader bullish invalidation now raised to 4213/25.
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Notes: close look at price action shows Bitcoin continuing to trade within the confines of an ascending median-line formation (modified) with prices reversing off parallel resistance yesterday in New York trade. Interim support now rests at 4700 with near-term bullish invalidation set to 4600.
A breach above the median-line targets 4979 – Look for a reaction there. Bottom line: Bitcoin prices remain at risk for a near-term pullback while below the ML, but the focus remains higher while within this near-term formation.
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- A summary of IG Client Sentimentshows traders are net-long Bitcoin- the ratio stands at +1.56 (60.9% of traders are long) –bearishreading
- Long positions are 5.1% higher than yesterday but 0.6% lower from last week
- Short positions are 2.4% higher than yesterday and 18.9% 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. Positioning is more net-long than yesterday but less net-long from last week. The combination of current sentiment and recent changes gives us a further mixed Bitcoin trading bias.
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Relevant Data Releases
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Other Setups in Play
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- Weekly Technical Outlook: Post-NFP Setups in View as USD Struggles
- USD/CHF Rally Eyes Major Resistance Ahead of NFP
- Crude Oil Price Analysis– Losses to Persist Near-term
- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex or contact him at email@example.com.