BITCOIN FORECAST: BTC/USD PRICE UNDER PRESSURE, TESTING SUPPORT AMID US DOLLAR STRENGTH
Bitcoin has been stumbling lower since BTC/USD notched a fresh record high above the $60,000-price level earlier this month. The popular cryptocurrency stretched another -2% lower today even in spite of Elon Musk tweeting you can now buy a Tesla with Bitcoin. It appears that BTC/USD price action has been under pressure largely in response to broad-based US Dollar strength. Bitcoin selling pressure over recent sessions has steered BTC/USD lower to test critical trend support. This trendline is extended through the major year-to-date swing lows notched on 27 January and 28 February.
BTC/USD PRICE CHART: DAILY TIME FRAME (19 DEC 2020 TO 24 MAR 2021)
A break of this ascending trendline could see another push by Bitcoin bears toward the psychologically-significant $50,000-price level. The positively-sloped 50-day simple moving average, as well as the lower Bollinger Band, reinforce this potential zone of technical support. Catching a bid off this technical support level could bring all-time highs back into focus. A softer US Dollar, coupled with stimulus checks trickling their way into the financial system, might help this bullish scenario materialize.
Negative divergence on the relative strength index is notable, however. So too is the short-term bearish trend underpinned by its 8-day simple moving average and recent string of lower highs. Failure to reclaim this nearside technical obstacle could coincide with more weakness for BTC/USD price action. To that end, invalidating the support level near $50,000 might see BTC/USD price action slide toward its 100-day simple moving average before bulls take a stand.
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