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Bitcoin is consolidating at the middle of its range in what seems to be a continuation signal.
BITCOIN PRICE ANALYSIS
Bitcoin has found support at the $5,800 handle and resistance at $6,800 but is currently sitting right at the middle. Price seems to be stuck in a bearish flag, which is often considered a continuation signal.
In that case, bitcoin could tumble back to the bottom of its range to test support before buyers return. The 100 SMA is below the longer-term 200 SMA after all, so the path of least resistance might be to the downside. In addition, both moving averages appear to have held as dynamic resistance levels.
However, the gap between the moving averages has narrowed to signal weakening bearish pressure and a potential upward crossover. In that case, bullish momentum could return and push bitcoin price back to the resistance.
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In that case, the inverse head and shoulders could be completed and a break past the range resistance or neckline could spur an even longer-term rally.
RSI reached oversold levels and has started to pull up, also hinting at a return in bullish momentum. Stochastic just made its way to oversold territory and has yet to turn higher.
Bitcoin is on the back foot once more, erasing almost half the gains posted in the previous week on negative commentary and overall risk aversion. Trade tensions are worsening, boosting demand for the safe-haven dollar even as retaliatory measures could hurt its economy.
Hawkish commentary from Fed official Evans also helped shore up demand for the dollar as he expressed support for two more hikes this year, after previously dissenting the December 2017 hike. This also supported investor confidence that the US economy can weather any uncertainties from trade troubles as Evans acknowledged the strong support from fiscal policy.
Traders are now holding out for further catalysts, whether it be more negative remarks that push it back down or positive developments in the industry.
By Rachel Lee On Jul 12, 2018
