As Geopolitical Tensions Cool, BTC/USD Holds Its Breakout.
As geopolitical tensions between the US and Iran show signs of cooling, BTC/USD remains well bid.
Having held the breakout of its 6-month downward trending channel, we have raised our blue support zone to $7,401-$8,243.
Bulls might treat this new support zone as a level to accumulate on weakness, anticipating an eventual break of the orange resistance zone and a test of the recent $12,000-$14,000 highs.
Bears might continue to short the bottom of the orange resistance zone at $9,215 after seeing it aggressively rejected 2 days ago on its first attempt.
As our support and resistance zones converge, traders will be working with tighter stops and should be mindful that this can give rise to increased volatility and more false signals.
Momentum bulls will be closely watching whether we break 70 RSI and test the all-important 80 RSI resistance, or if we begin oscillating back to “oversold” levels.
Medium-term traders will note that the 50-day EMA is crossing from below to above the 200-day EMA, potentially adding weight to the possibility that the 6-month downtrend is reversing.
Traders should also be on the lookout for increased volatility this week as we approach Chinese New Year.
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