Bitcoin Price Analysis: BTC/USD Creating Double Top?

Bitcoin Price Analysis

Bitcoin price climbed higher once again vs the US Dollar, and created a new minor high of $464.69. However, there are chances of BTC/USD to create a double top pattern, which can take it down in the short term.

Yesterday, I highlighted a bullish trend line on the hourly chart of the BTC to USD (data feed via Bitstamp), which acted as a support area in taking the price higher.

Bitcoin price to move down?

Bitcoin price recently found support near the 100 hourly simple moving average, and moved higher to create a new weekly high of $464.69. However, the upside was limited, as sellers defended gains and pushed the price down.

Since the failure was just around the last swing high, there is a chance that BTC/USD is creating a double top pattern around $464, as highlighted in the chart attached.

If the pattern is true, then the price may move down, and test the highlighted bullish trend line or even test the 61.8% Fib retracement level of the last leg from the $439 low to $463 high.

However, an initial support on the downside is near the 100 hourly SMA, which is sitting near the 38.2% Fib retracement level of the last leg from the $439 low to $463 high.

I would not recommend any sell trade, as there are many support levels on the downside, but the pattern seems certain.

So, I would recommend to wait and watch until there is a major move either downside or above the recent swing high of $464.69.

If there is a break above the double top resistance area, then a move towards the $470 level is possible in the short term. The market sentiment looks bearish as of writing this article.

Happy Trading!

Chart Source – TradingView.com and data feed by Bitstamp

Aayush Jindal

Aayush has spent over EIGHT years as a financial markets contributor and observer. He specializes in market strategies and technical analysis, comes with an IT background. He possess strong technical analytical skills and is well known for his entertaining and informative analysis of the currency and commodities markets.

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1 Response

  1. May 11, 2016

    […] US dollar. During the downside move, it also broke a bullish trend line formed on the hourly chart (highlighted in yesterday’s post as […]

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