Bitcoin Technical Price Outlook: BTC/USD Trade Levels
Bitcoin prices plunged more than 42% off the November record highs with BTC/USD stabilizing just above the September lows. We’re looking for signs of a low in price and the focus shifts to a breakout of the recent range for guidance here. These are the updated targets and invalidation levels that matter on the BTC/USD technical price charts. Review my latest Strategy Webinar for an in-depth breakdown of this Bitcoin setup and more.
Bitcoin Price Chart – BTC/USD Daily
Chart Prepared by Michael Boutros (log scale), Technical Strategist; Bitcoin on Tradingview
Technical Outlook: The Bitcoin sell-off took another leg lower into the open of the year with the cryptocurrency plummeting another 14.3%. In our last webinar we noted the non-confirmation low seen in Bitcoin & Ethereum – highlighting the threat for some recovery off these lows. That rally faltered into the 61.8% retracement of the July rally at 44032 and the focus remains on a breakout of this near-term range with daily support eyed at the September low-day close at 40596.
Bitcoin Price Chart – BTC/USD 240min
Notes: A closer look at Bitcoin price action shows BTC/USD trading within the confines the same descending pitchfork formation extending off the October / November highs that we presented in our November Bitcoin Price Outlook. Price is testing near-term support today at the 61.8% retracement of the recent recovery / 100% extension of the recent decline at 41152/429– looking for a reaction here. A breach above the median-line would shift the focus back towards subsequent resistance objectives at 44032, the 100% extension of the rebound / yearly open at 46042/199 and the upper parallel / 48051– a breach / close above this threshold is needed to suggest a more significant low is in place with such a scenario exposing 52956-53567. Ultimately, a break / close below the September low-day close at 40596 would risk another bout of accelerated losses towards the lower parallel / 78.6% retracement at 37245 and the 61.8% extension at 35392.
Bottom line: Bitcoin rebounded off downtrend support last week with BTC/USD trading just below the median-line -we’re on breakout watch with the broader risk still weighted to the downside. From at trading standpoint, a good zone to reduce short-exposure / lower protective stops- be on the lookout for an exhaustion low ahead of 40596 IF price is making a turn higher with a breach above the yearly open needed to clear the way. Stay nimble here- a break of the lows could fuel another 11% drop towards initial support.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
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– Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex