BTCUSD has been trending higher on the short-term and long-term time frames, but it looks like buying pressure is weakening. Price is stuck inside a rising wedge formation and got rejected on the test of resistance. BTCUSD could make its way back to the wedge support around $425 to gather more buying energy. This coincides with the 100 SMA dynamic support and is slightly above the longer-term 200 SMA.
Speaking of moving averages, the 100 SMA is above the 200 SMA for now so the path of least resistance is still to the upside. This suggests that the wedge support might still hold and spur a bounce back to the resistance near $440. Stronger bullish momentum could even trigger an upside breakout and a sharper climb.
Meanwhile, RSI is on the move down so BTCUSD could follow suit. Stochastic is also heading south, which means that selling pressure is present. If bears are strong enough, they could push for a downside break of support and a longer-term selloff for bitcoin.
Data from the US economy has been weak but this didn’t prevent traders from buying up the dollar. The Doha meeting failed to produce a deal to cap production, which suggests a worse supply glut and even weaker prices, keeping risk aversion in play and weighing on BTCUSD.
There are no major reports due from the US economy this week so risk sentiment could push bitcoin price around. Top-tier catalysts include the ECB statement and the jobs release from the United Kingdom, although these might have minimal firepower. Any updates on crude oil production and talks among other oil producers could continue to impact risk-taking.
To contact the reporter of the story: Samuel Rae at samuel@forexminute.com
