BTCUSD Price Technical Analysis – Rally Reversal in Sight?

By June 16, 2016Bitcoin Business

BTCUSD has been rallying almost nonstop in the past few days due to an influx of funds moving into the cryptocurrency and away from stock markets and fiat currencies. However, price could be topping out as a bearish divergence has materialized.

On the 4-hour time frame of BTCUSD, price has formed higher highs while stochastic showed lower highs since June 12. This could be a sign that buyers are running out of steam and might need a bit of profit-taking to happen before resuming the climb. Stochastic is also indicating overbought conditions but hasn’t crossed lower.

Meanwhile, the 100 SMA is above the 200 SMA so the path of least resistance is still to the upside. This means that even if any sharp drop happens, BTCUSD could still draw support from nearby support areas such as $700 and $660, which is near the dynamic support at the 100 SMA.

Take note, though, that a doji can be seen on the 4-hour time frame and a close below the low of the candle could confirm that sellers are about to take over. But if this candlestick signal is invalidated, more buyers could join the mix and take bitcoin up to the next key resistance at $800.

Bitcoin price has been surging into the weekend for the past three weeks so this phenomenon could be observed once more, especially since this is the last weekend leading up to the EU referendum. So far, there has been no word as to whether the vote will be postponed owing to the fatal shooting of UK MP Jo Cox.

For now, EU referendum campaigning has been temporarily suspended possibly until the weekend. Analysts remarked that this incident might convince the undecided voters to favor staying in the EU, potentially avoiding additional uncertainty in the region.

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