Bitcoin Technical Price Outlook: BTC/USD Trade Levels
Bitcoin prices fell more than 3.5% since the start of the week with BTC/USD trading at 45335 in early US trade. A breakout in early-august trade may vulnerable here and while the broader outlook is weighted to the topside, the threat for a near-term correction within the confines of the uptrend remains. These are the updated targets and invalidation levels that matter on the BTC/USD technical price charts. Review my latest Strategy Webinar for an in-depth breakdown of this Bitcoin setup and more.
Bitcoin Price Chart – BTC/USD Daily
Technical Outlook: In last month’s Bitcoin Price Outlook we noted that the BTC/USD sell-off was approaching key support objective just lower- “look to reduce short-exposure / lower protective stops on a stretch into key support at 27169-27734 – expect a larger reaction there IF reached. Ultimately, the risk remains for a fresh monthly low here with a breach above the July open needed to put the bulls back in control.” Price never made it there- Bitcoin registered a low 29296 the following day before reversing sharply higher with BTC/USD rallying more than 64% off that mark.
Bitcoin Price Chart – BTC/USD Daily (2018 Price Action Parallel)
The rally has continued to trade within the confines of an ascending pitchfork formation extending off the yearly lows with a turn off the 75% parallel last week now testing median-line support. Note that ongoing momentum divergence continues to highlight the threat for some back & fill here and while the broader outlook remains constructive, the immediate advance may be vulnerable here near-term. Note that a parallel of the structure of the 2018 decline (magenta) continues to suggest the risk remains for continued weakness IF These Highs Hold.
Bitcoin Price Chart – BTC/USD 240min
Notes: A closer look at Bitcoin price action shows BTC/USD turning just ahead of the April low-day close at 49128 this week before pulling ack with price now sitting on median-line support in early US trade. Confluent support now rests at 40706-41929 backed by 38395– both areas of interest for possible downside exhaustion IF reached. A topside breach keeps the focus on subsequent resistance objective at the 61.8% Fibonacci retracement of the yearly decline at 51030– look for a larger reaction there IF reached with a breach / close above likely to fuel another accelerated rally towards the 78.6% retracement / May open at 57128/790.
Bottom line: The Bitcoin rally may be vulnerable here near-term as price stalls into uptrend resistance. From at trading standpoint, a good zone to reduce long-exposure / raise protective stops- be on the lookout for downside exhaustion ahead of 38395 IF price is indeed heading higher on this stretch with a breach / close above 51000 needed to clear the way for the next leg higher in Bitcoin.
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– Written by Michael Boutros, Currency Strategist with DailyFX
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