Bitcoin Analysis: Awaits bullish reversal confirmation

Omkar Godbole FXStreet Contributor

Heightened caution ahead of Chain-Split on July 21/Aug 1 saw investors move out of the Bitcoin space over the weekend. The BTC/USD suffered a head and shoulder breakdown on Friday and extended losses to $1758.20 - the lowest level since May 17. Bitcoin is currently trading above $2000.

Technicals

Resistance

$2089 (5-DMA)
$2197 (38.2% Fib R of Apr 15 low - June 12 high)
$2250 (Oct 7 low)

Support

$1950 (50% Fib R of Apr 15 low - June 12 high)
$1909.58 (session low)
$1758.20 (previous day’s low)

Daily chart

Observations

Spinning bottom - Sunday’s candle
Head & Shoulders breakdown
RSI is turning higher from oversold territory
100-DMA is still sloping upwards

Commentary:

An end of the day close above the 100-DMA of $2053 today would add credence to Friday’s rounding bottom formation, oversold RSI could yield $2198-$2310 (head and shoulders neckline).
On the downside, failure to hold above $1950 (50% Fib) if followed by a break below $1909 shall open doors for $1561 (Head and Shoulders breakdown target as per the measured height method).
Caution is advised, even if Bitcoin confirms a bullish reversal as uncertainty ahead of the scaling issue could trigger panic selling.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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