Bitcoin is continuing to run into offers, falling another 5% today. The digital currency is down more than 10% on the week after two weeks of consolidation failed to bring out the buyers. It is now 2K shy of that $30,000 handle. Bitcoin got a hammer last month because of regulatory concerns in China and after Tesla stopped accepting BTC as a form of payment on environmental concerns. Today it looks like investors are spooked by the Department of Justice’s move to seize $2.3 million in bitcoin as part of its investigation into a ransomware attack that shut down the nation's largest gas pipeline. This has fuelled concerns that the US could ramp up its crypto regulation.
Whatever the reason is, Bitcoin has been breaking support levels and respecting resistance levels ever since it failed to hold the breakout on Thursday from the triangle pattern. That failure saw prices give back most of their gains made over the previous two weeks.
What I am now looking for is a swing failure around $30K – a quick rejection after a small deviation below. That would be an ideal technical scenario for the bulls. There is also the possibility of prices going back above the broken support at $33,333. If this happens, we will still need to see a higher high above $36800 for confirmation.
Longer-term, we need to see BTC climb above $39K resistance to tip the balance back in the bulls’ favour decidedly. Unless that happens, I would caution against being too aggressive on any new long trade signals that may show up on the lower timeframes in the interim.
Source: ThinkMarkets and TradingView.com
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