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BTC/USD: Interesting Price Action Seen for the Major Crypto

By:
Aaron Hill

BTC/USD continues to favour buyers, given the current uptrend and room to rally to weekly resistance.

Bitcoins, FX Empire

In this article:

Things have changed fast since the weekend!

Against the US dollar, Bitcoin (or BTC/USD) is poised to end another session on the front foot.

You will note that the Research Team pencilled in the following in the week-ahead post (italics):

From the daily timeframe, the key technical observation, particularly for chart pattern enthusiasts, is the ascending triangle pattern formed between $34,758 and $37,999 in a market trending higher. Ascending triangles are recognised as continuation chart patterns within uptrends (traders tend to buy the breakout above its upper limit and project a profit objective using its base value, which, in this case, is $41,223). You will note that price tunnelled through the upper boundary of the ascending triangle last week, effectively handing the baton to breakout buyers. You will also see that support at $37,624 was recently retested (prior resistance), movement adding weight to the upside breakout.

As evident from the daily timeframe, the price tested the ascending triangle’s profit objective at $41,223 today and shook hands with neighbouring resistance on the daily timeframe at $41,500.

Where Next for the Major Crypto?

Is it time for a reversal?

Are we just taking a breather?

Are we heading for higher levels?

These are all valid questions.

According to the Relative Strength Index (RSI), the monthly chart is testing overbought levels not seen since early 2021 and the daily chart is demonstrating early negative divergence from oversold territory. This tells traders/investors that BTC/USD is overvalued at this point in time and could either chalk up a correction or consolidate (take a breather) from daily resistance at $41,500.

The caveat to the above, however, is that the weekly timeframe shows room to press higher until a resistance zone between $46,112 (1.272% Fibonacci projection ratio [‘alternate’ AB=CD pattern]) and horizontal resistance at $42,971. Adding to this, both the weekly and daily timeframes are trending higher.

BTC/USD Still Favours Bulls

Given the above, this market continues to lean in favour of buyers, and current daily resistance may be fragile. Therefore, a daily breakout beyond $41,500 could unearth a possible bullish scenario towards daily resistance coming in at $43,828 (sits between the weekly resistance area mentioned above at $46,112-$42,971). Following a possible breakout higher, conservative traders will likely seek at least a retest of $41,500 as a support level before considering committing.

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Charts: TradingView

DISCLAIMER:

The information contained in this material is intended for general advice only. It does not take into account your investment objectives, financial situation or particular needs. FP Markets has made every effort to ensure the accuracy of the information as at the date of publication. FP Markets does not give any warranty or representation as to the material. Examples included in this material are for illustrative purposes only. To the extent permitted by law, FP Markets and its employees shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided in or omitted from this material. Features of the FP Markets products including applicable fees and charges are outlined in the Product Disclosure Statements available from FP Markets website, www.fpmarkets.com and should be considered before deciding to deal in those products. Derivatives can be risky; losses can exceed your initial payment. FP Markets recommends that you seek independent advice. First Prudential Markets Pty Ltd trading as FP Markets ABN 16 112 600 281, Australian Financial Services License Number 286354.

About the Author

Aaron Hillcontributor

Aaron graduated from the Open University and pursued a career in teaching, though soon discovered a passion for trading, personal finance and writing.

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