Bitcoin (BTC/USD) Price Technical Analysis for Oct 17, 2017

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Bitcoin has staged a strong rally a few days back but is now consolidating in a bullish continuation pattern. A small ascending triangle can be seen on the short-term time frames and a break past the resistance around $5800 could draw more buyers in.

On the other hand, a break below the triangle support could signal a larger correction underway, possibly until the ascending trend line support around $5000-5200. The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside, which means that the uptrend is more likely to continue than to reverse.

Also, the 100 SMA is close to the ascending trend line support, adding an extra layer of defense near $4800. Stochastic, however, is turning lower to signal that selling pressure could pick up. Similarly, RSI is heading south so bitcoin might follow suit.

The US dollar has caught a bid on Monday on rumors that Trump is also strongly considering John Taylor as next Fed head after being impressed after their meeting. Taylor is considered relatively hawkish compared to other candidates like Warsh and Powell. Trump is also scheduled to meet Fed Chairperson Yellen on Thursday so there may be a glimmer of hope that she could stay on.

Data from the US has been stronger than expected as the Empire State index beat forecasts but didn’t seem to be enough to shore up odds for more rate hikes in 2018. Note that the latest NFP, CPI, and retail sales reports have mostly disappointed, which suggests that downbeat policymakers might still refrain from voting for a hike in the December meeting.

As for bitcoin, the cryptocurrency remains supported by geopolitical risks from North Korea. Although it was reported that diplomats from both parties are hashing it out, Pyongyang has previously stated that it is not open to a diplomatic solution. With that, persistent market fears could keep demand for bitcoin or digital gold in place.

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