BTCUSD is still inside its ascending channel visible on the 1-hour time frame, confirming that the uptrend could continue. Price bounced off the channel support at the $670 area and is ready to climb back to resistance at $690. The 100 SMA is above the longer-term 200 SMA, confirming that the path of least resistance is to the upside. Also, the 100 SMA held as dynamic support since it lined up with the bottom of the ascending channel. Another test of support could still bounce off the 200 SMA, which would be the line in the sand for this uptrend.
RSI is on middle ground, barely offering strong directional clues. Stochastic is indicating overbought conditions and is turning lower, hinting that sellers could still regain control. In that case, a downside break of support could be seen, taking price down to the next area of interest at $650.
The IMF’s decision to downgrade global growth forecasts spurred strong demand for bitcoin once more, as the cryptocurrency typically rallies when traders are seeing a higher degree of uncertainty in the financial markets.
Catalysts lined up this week include the ECB interest rate decision and the RBNZ’s economic update on Thursday. An easing bias could draw traders away from currency markets and equities, encouraging them to move funds to alternative assets like bitcoin instead.
On the other hand, reassuring remarks could bring risk appetite back to stock markets and lead traders to let go of their bitcoin holdings in the process. The US dollar appears to be strongly supported thanks to risk aversion and improving US fundamentals. Earnings reports from large companies could also have an impact on USD action.
To contact the reporter of the story: Samuel Rae at samuel@forexminute.com
