Bitcoin (BTC/USD) Price Technical Analysis for June 29, 2017

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Bitcoin is currently pulling up to a broken support zone, which might now hold as resistance. Applying the Fib tool on the latest swing high and low shows that the 50% to 61.8% retracement levels line up with this area of interest.

However, the 100 SMA has crossed above the longer-term 200 SMA to signal that the path of least resistance is to the upside. In addition, the recent consolidation looks like a bullish flag pattern, which is a classic continuation signal. In that case, a bitcoin rally of around $200 in height or the same size as the mast of the flag could be in the cards.

If resistance holds, though, bitcoin could head back to the swing low near $2300 or lower. The moving averages are close to the 61.8% Fib and might hold as dynamic inflection points. A break above these could confirm that buyers are in control.

Stochastic is already indicating overbought conditions, which shows rally exhaustion. RSI is still making its way there so there may be some bullish momentum left in play.

Dollar weakness has been seen lately owing to weaker growth prospects on speculations that the Trump administration can’t push its reform agenda before the end of 2017. This led to the IMF downgrading growth forecasts for this year and the next, casting doubts that the Fed can keep up its tightening pace in 2018.

Meanwhile, cryptocurrencies in general have taken hits on negative updates earlier in the month. Investor Mark Cuban warned that bitcoin is in a bubble while a Goldman Sachs analyst gave a bearish forecast. Also, outages in a couple of big exchanges occurred and led many to worry that bitcoin could no longer handle more transactions.

In this particular market, herd mentality usually comes into play since dynamics are driven by demand and speculation. Unless there’s a big catalyst that spurs more rallies for bitcoin, there could be more consolidation or losses looking forward.

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