Fourth straight weekly loss for BTC/USD
BTC/USD remains entrenched in a corrective slide, bolstered by the Fed minutes emphasising reluctance to ease policy until confidence in the disinflation process is observed.
Early downtrend signalled, but…
Down for a fourth consecutive week and shedding -6.3%, the major crypto pairing is now displaying early signs of a longer-term downtrend on the weekly timeframe, given the fresh lower low formed last week at $53,412 – its lowest value since late February.
The weekly timeframe’s structure, nevertheless, points to a potential rebound. Support at $56,796 and channel support, taken from the low of $60,717, recently welcomed price action. Should bears take a back seat here and bulls make a show, we could still be looking at a possible bullish flag formation (drawn from the above low at $60,717 and the crypto’s all-time high of $73,845). However, considering recent downside momentum, the risk of further declines remains and could unmask possible follow-through selling towards another layer of support coming in at $51,948.
Daily support
Thursday witnessed the break of trendline support, extended from the low of $26,665 (a bearish signal). Of note, price action has also made its way south of the 50-day simple moving average (SMA) at $64,758, yet we have not seen the unit cross below the 200-day SMA at $51,698. Despite the bearish cues, Friday shook hands with a 100% projection ratio at $54,678 (an AB=CD bullish pattern), complemented by a 38.2% Fibonacci retracement ratio from $55,151. South of here, a decision point area calls for attention at $50,601-$53,015, followed by another layer of support at $48,007.
Price direction this week?
This week, on the side of sellers, we have an early downtrend present depicted through price structure (the lower low on the weekly), and the trendline support and the 50-day SMA breach on the daily. However, sellers must contend with heavyweight support on the weekly and daily timeframes ($56,796 and $54,678, respectively). It should also be noted that should these levels cede ground, the daily decision point area at $50,601-$53,015 awaits nearby, which houses the next layer of weekly support mentioned above at $51,948 and the 200-day SMA at $51,698. Therefore, sellers will likely be reluctant to commit until at least current support is consumed, which may trigger a rebound higher this week.
Author
Aaron Hill
FP Markets
After completing his Bachelor’s degree in English and Creative Writing in the UK, and subsequently spending a handful of years teaching English as a foreign language teacher around Asia, Aaron was introduced to financial trading,
