The 100 SMA is below the longer-term 200 SMA on this time frame so the path of least resistance is to the downside. Also, the 100 SMA lines up with the top of the channel, adding to its strength as resistance. The longer-term 200 SMA is slightly above the channel resistance at $575, which might be the line in the sand for this selloff.
Stochastic is heading south so BTCUSD might follow suit while sellers stay in control of price action. Also RSI is pointing down to show that bearish pressure is in play. This could take bitcoin down to the channel support at $560-565.
The US dollar enjoyed a strong boost in the financial markets when Fed head Yellen said that the case for a rate hike has strengthened in the past months. This should keep the FOMC on track towards tightening in September or December, which might be enough to support the currency against its counterparts in the next few weeks.
However this could still hinge on how economic data turns out, particularly when it comes to employment and inflation. Earlier this week, the core PCE price index printed a meager 0.1% uptick enough to bring the annual rate to 1.6%, which is still short of the 2% inflation target. With that, traders will pay close attention to the average hourly earnings figure to see stronger evidence of price pressures.
Also, leading jobs indicators might also give hints on how Friday’s NFP reading might turn out. A higher than expected gain could keep Fed rate hike hopes in play and yield more gains for the dollar versus bitcoin. On the other hand, disappointing NFP data could trigger an upside break from the BTCUSD channel.