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Technical Analysis – BTCUSD trades sideways, bearish pattern remains intact

Technical Analysis – BTCUSD trades sideways, bearish pattern remains intact

BTCUSD (Bitcoin) has been generating a structure of lower highs and lower lows after peaking at the 11-month high of 31,064 in mid-April. However, the price has been rangebound in the past week, waiting for developments that could provide fresh directional impetus.

The momentum indicators are currently well within their negative territories, but they are also suggesting that positive momentum is picking up. Specifically, the stochastic oscillator posted a bullish cross just shy of the 20-oversold mark, while the RSI ticked up beneath its 50-neutral mark.

If the bulls manage to push the price above the restrictive trendline that connects the recent peaks, immediate resistance could be met at 27,988, which is the 38.2% Fibonacci retracement of the 48,226-15,479 downtrend. Surpassing that zone, Bitcoin could ascend to challenge the 11-month high of 31,064. Further advances could then cease at the 50.0% Fibo of 31,852.

Alternatively, bearish actions could trigger a price retreat towards the recent 2½-month low of 25,350. Should that floor collapse, the spotlight could turn to the 23.6% Fibo of 23,207. Even lower, the 21,375 hurdle could provide downside protection.

Overall, BTCUSD has been trading sideways during the past week, but short-term oscillators are indicating that the bullish momentum is slowly intensifying. Thus, a clear break above the descending trendline is needed to revive bulls’ hopes for a trend reversal.

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