Bitcoin Price Key Highlights
- Bitcoin price found support at the 61.8% Fibonacci retracement level on the daily time frame, as predicted in the previous article.
- Price has made a short-term double bottom at that area and broke past the neckline after early regional results from the UK suggested a possible Brexit.
- Bitcoin could be back on track towards a climb to the previous highs around $775 if the UK does leave the EU.
Bitcoin price has drawn support from increased financial market uncertainty once more, but technical indicators are suggesting a short-term drop.
Technical Indicators Signals
On the 1-hour time frame, the 100 SMA is below the 200 SMA so the path of least resistance could be to the downside. Bitcoin price is approaching the 100 SMA, which might hold as dynamic resistance. This also lines up with an area of interest or former support around $660.
Stochastic is indicating overbought conditions but hasn’t crossed lower yet. This means that buyers might still have enough energy to push for gains but that the bullish momentum might be exhausted. RSI is also in the overbought region but hasn’t crossed lower to indicate a return in selling momentum just yet.
The main event that traders are watching this week is the EU referendum, which has been pushing bitcoin price action around so far this month. Surveys suggesting a lead in favor of the UK leaving the EU have supported bitcoin since this scenario would bring a huge amount of uncertainty in the financial markets, leading traders to pursue alternative investments.
The official results are set to be announced soon and so far the lead is in favor of a Brexit, leading to sharp declines for the British pound and European futures. This could spill over to the rest of the global markets, as weaker economic activity in the European region could weigh on demand for commodities and trade activity in other parts of the world.
With that, bitcoin price could be poised for further upside in the event of a Brexit, possibly even pushing past its highs this month and creating new ones closer to $800-900.
Charts from TradingView