Bitcoin appears to be at a crossroads, as price is testing a resistance-turned-support zone that could also be the neckline of a long-term double top.
Could it go for a major reversal from here?
Bitcoin (BTC/USD) Daily Chart by TradingView
After hitting fresh record highs lately, bitcoin suffered a sharp tumble as markets grew extra jittery about resurfacing trade tensions between the U.S. and China.
Safe-haven flows leaned in favor of the lower-yielding U.S. currency versus the high-risk OG crypto, dragging BTC/USD back down to an area of interest visible on the daily time frame.
Can it stay afloat or are we about to see a long-term downtrend?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. dollar and the bitcoin, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Price is hovering just above S1 ($108,234) which happens to line up with a former ceiling that held around the middle of the year. Support seems to be holding so far, but it’s also worth noting that this area could serve as the neckline of a reversal chart pattern.
Look out for a break below support that could send bitcoin down to the next bearish targets at S2 ($102,403) then S3 ($97,536) or for a steady selloff that’s the same height as the double top formation.
On the other hand, reversal candlesticks around current levels could trigger a bounce back to upside targets at R1 ($118,932) then R2 ($123,799) near the all-time highs. Keep your eyes peeled for sustained bullish momentum past this point, as this could encourage bitcoin bulls to keep charging to fresh highs closer to R3 ($129,630)
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
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