BTCUSD made yet another strong rally towards the end of the previous week, buoyed by prevailing uncertainties in the financial markets. Price is now stalling at an area of interest around $700 and might be due for a break higher or a bit of profit-taking. Any strong pullback could offer a chance to hop in on a correction to catch the longer-term climb. Bulls could be eyeing the next resistance at $900-1,000 if the upward momentum continues.
The 100 SMA is above the longer-term 200 SMA on this time frame so the path of least resistance is to the upside. However, a downward crossover seems imminent so sellers might have a chance to regain control and push for a selloff.
In addition, stochastic is deep in the overbought region, indicating that buyers are already exhausted. Still, this oscillator has yet to cross lower to show that bears are able to gain the upper hand. Similarly, RSI is in the overbought zone but hasn’t shown any indication of moving south yet.
The upcoming FOMC statement could prove to be a catalyst for volatility, as traders are expecting more cautious remarks from Fed officials. Downgrades to growth and inflation forecasts might also be seen but a repeat of their upbeat outlook could be enough to drive dollar demand and renew speculations of a hike in July. No actual changes to interest rates are expected this week.
Meanwhile, downbeat data from China has driven more investors to put more money in the virtual currency in anticipation of potential easing from the Chinese central bank or yuan devaluation. The government might also impose capital controls on stock trading, which explains why funds are moving out of their equities and into bitcoin.
Lastly, the upcoming EU referendum is discouraging traders from playing European currencies, also driving up demand for […]
