BITCOIN SHORT-TERM TECHNICAL OUTLOOK – NEUTRAL
After lackluster trading over the past few weeks, Bitcoin appears to be gaining some traction. However, it would be too soon to conclude that the tide has changed for cryptocurrencies.
BTC/USD has traded within a narrow range since mid-December, holding around crucial support at the December 7 low of 16690, highlighted in the previous update. The hold above the support keeps alive the view of a broader base-building in cryptocurrencies, that is, scenario 1 pointed out in mid-November. Having said that, the hold above a support area wouldn’t necessarily imply bullishness. That’s because BTC/USD has seen similar bouts of strength in recent months which weren’t sustained.
In particular, the 89-day moving average has been a significant barrier since mid-2022, coinciding with another ceiling at the mid-December high of 18370. Until the barrier is cleared, the path of least resistance remains sideways to down for BTC/USD. A decisive break above could pave the way initially toward the 200-day moving average, potentially toward the 5 November high of 21470.
BTC/USD Weekly Chart
Chart Created Using TradingView
On the downside, 16200-16700 continues to be a strong cushion. Any break below would confirm that the upward pressure had faded, raising the odds of a broad range of 15500-18500 developing in the interim. Furthermore, a decisive break below the November low of 15480 could pave the way toward the 2019 high of 13895.
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