Bitcoin technical analysis - potential selling price

Translation: spring_zqy

Bitcoin technical analysis - potential selling price

If Bitcoin traders decide to book profits on their recent long positions, there is a chance that the price could crash.

Key points:

As expected, the price of Bitcoin rebounded sharply over the weekend and then entered the consolidation zone again.

There is a symmetrical triangle pattern on the hourly chart, indicating that it is still uncertain whether it is a bullish or bearish market.

The rally has been fading over the past week, suggesting profit-taking may be on the horizon.

If Bitcoin traders decide to book profits on their recent long positions, there is a chance that the price could crash.

Technical indicators

The 100-day simple moving average (SMA) is above the 200-day SMA, which suggests that the lowest resistance is rising and more gains may be next. Moreover, the short-term moving averages are aligned with the symmetrical triangle support and can act as active reflection levels. The distance between the two moving averages is widening, so bullish pressure may be slowly forming.

However, the stochastic index is moving downwards, so sellers will take control of the price and push for a downside breakout. If so, the next move is to move to around $675 to $700, which is also near the profit taking zone and close to the 200-day SMA. A break below this area will lead Bitcoin to fall towards the long-term support at $575.

The relative strength index has already started to move higher before reaching the oversold zone. If buyers continue to control the market, the price of Bitcoin will break out to the upside again, depending on the results of market activities this week.

Market Dynamics

Bitcoin prices have been supported by uncertainty in financial markets this month, as traders have moved money from traditional investments such as stocks and currencies to assets such as cryptocurrencies. The upcoming EU referendum will have a huge impact on these markets, and some analysts believe that central banks may intervene if the UK votes to leave the EU.

In this case, the price of Bitcoin could see a sharp recovery as investors move funds from the stock market into the virtual currency. On the other hand, if the vote is to remain in the EU, it would be a reversal of the status quo and could allow traders to book profits on their previously long positions in Bitcoin.