The bitcoin daily chart is trying to break out of its bearish channel between the lower blue and red bands. To this end, we are keeping an eye on its RSI. It is currently on the bearish side of 50 (green rectangle). For bitcoin to move upwards, the RSI will need to cross above 50 and maintain that position.
The hourly chart is showing resistance at the R2 pivot. Th stochastic has crossed down (black ellipse), but the trend-following EMAs are yet to do so. If they follow suit, it will be bearish. Moreover, if the stochastic moves below 20 (blue arrow), the hourly momentum will be down.
However, if the EMAs stabilise and the stochastic manages to cross up again, the R2 pivot will be tested again.
Traders are keeping a close eye on factors like the U.S. economy, interest rates, and the possibility of the U.S. debt ceiling not being raised. These factors affect both the stock market and Bitcoin's trading behaviour, which tends to follow the Dow Jones Industrial Average and S&P 500. The potential risk of a U.S. debt default is a major concern, as it can hinder the growth of risky assets.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.