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Bitcoin Analysis: Awaits bullish reversal confirmation

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

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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