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Bitcoin Pressured to The Downside as Sellers Take The Lead

Bitcoin Pressured to The Downside as Sellers Take The Lead

Nick Cawley, Strategist

Talking Points

- Bitcoin (BTC) has broken below both the 20- and 50-day moving average

- Initial support seen at June 27 low of $2270

The digital currency has had a poor run of late after hitting an all-time high of just under $3000 a month ago. Bitcoin traded at a peak of $2980 on June 12 before dropping back to a low of $2103 on June 15, a precipitous fall of just under 30% in four trading sessions. The digital currency now sits around $2425 and has recently broken below both the 20-day and 50-day moving average, signalling further weakness in the short-term.

Chart: Bitcoin Daily Timeframe (December 23, 2016 – July 10, 2017)

Bitcoin Pressured to The Downside as Sellers Take The Lead

Chart by IG

Initial support should kick-in at the June 27 low of $2270 before the June 15 low of $2103 becomes in-play. And while trading ranges have been, relatively, small over the last 10 days, volatility is never far from the surface. The stochastic indicator however shows BTC to be heavily oversold – below 20 - and that may well provide a buffer to the downside before targets are met.

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--- Written by Nick Cawley, Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Don't trade FX but want to learn more? Read the DailyFX Trading Guides

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

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