Bitcoin (BTC/USD) Technical Analysis for Feb 21, 2018

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Bitcoin is hitting the resistance at the $12,000 area of interest where plenty of take-profit orders are probably located. Closing positions could lead to a drop back to the nearby support levels.

The 100 SMA is still below the longer-term 200 SMA on this time frame, but price has already moved past the moving averages to reflect some bullish momentum. The gap between the moving averages is also narrowing to reflect a potential turnaround.

Stochastic is on its way down to show that sellers have the upper hand. RSI has room to fall after recently turning down from the overbought zone. Applying the Fib extension tool shows the next potential downside targets.

The 38.2% extension is at $7653 then the 50% extension is at $6337 or near the swing low. The 61.8% Fib extension is at $5020 then the 76.4% extension is at $3391. The full extension is located at $759.

The US dollar has been performing well so far this week as stocks and commodities were hit by risk aversion. Note that bitcoin has been trailing these higher-yielding assets these days instead of taking advantage of risk-off flows.

The FOMC minutes are up for release today and this could spur more demand for the dollar if bond yields continue rising. Hawkish remarks could spur Fed tightening expectations which would ramp up demand for the dollar while also weighing on business and consumer prospects. In turn, this could drag risk assets like stocks, commodities, and cryptocurrencies lower.

Sentiment for bitcoin has improved last week as countries showed openness to further industry development. However, there are a few key officials like BOE head Carney who have pointed out the weaknesses of bitcoin as a store of value or investment vehicle.

On a more positive note, the second largest issuer of credit cards in India announced that it would not ban funding of crypto accounts using credit cards.

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