Bitcoin (BTC/USD) Price Technical Analysis for Jan 29, 2018

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Bitcoin recently broke to the upside of its symmetrical triangle consolidation pattern to reach a high of $12,193. Price is pulling back from this upside break and might test the Fib levels on the 1-hour time frame.

The 100 SMA is crossing above the longer-term 200 SMA to signal that the path of least resistance is to the upside. This suggests that the rally is more likely to resume than to reverse. These moving averages are also close to the 50% Fibonacci retracement level which might keep losses at bay.

A larger correction could last until the 61.8% Fib at the $11,000 level and the broken triangle resistance. If any of the Fib levels hold as support, bitcoin could make its way back to the swing high and beyond. Note that the chart pattern spans $9,500 to $14,000 so the resulting breakout could be of the same height.

Stochastic is already turning higher without even hitting oversold conditions on this time frame. This suggests that buyers are eager to hop back in. RSI has room to fall, though, so bitcoin price might carry on with the correction until both oscillators hit oversold levels and turn back up.

Bitcoin has encountered another blow on news of a Japanese exchange shutting down due to hacking. This revived fears about security and stability of the cryptocurrency.

To top it off, a cryptocurrency ranking group mentioned that Ripple and Ethereum are superior to bitcoin so any return in funds to the industry could favor these first.

Meanwhile, the dollar is on weak footing so BTCUSD could still see some upside from here. Note that the advance GDP report printed weaker than expected results at 2.6% growth so doubts about Fed tightening are in play. The FOMC statement is due this week and no changes in monetary policy are eyed.

Instead traders will keep close tabs on any remarks on dollar strength as this has been one of the biggest factors that influenced the currency’s direction in the previous week.

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