Yesterday, Bitcoin traded within a narrow range defined by a couple of key MAs and it was getting ready to break out – according to technical analysis. Well, that breakout has since happened, downwards, but its significance is still somewhat questionable, amid general bearish exhaustion. Where to now? Will the bulls re-assume control to bring BTC back to its May 5 high of $9,990? Is another attempt on 10k likely?
The last week or so marked a more or less obvious stalemate that took shape between the bears and the bulls, as neither party managed to decisively pull the price of the world’s most popular cryptocurrency its way.
The above said tight range was defined by the 50-day MA, at $8,287, and the 100-day MA, at $8,837. While a downward breakout from this range has indeed recently materialized, the price returned to that range afterwards. Right now, it is trading just under the $8.2k mark, thus slightly outside of the above-defined range again.
The above said 50-day MA level has grown into a sort of sturdy support over the last couple of weeks. Marking the support level where the most recent selloff (the one from the May 5th level of $9,990) ended, it still has an almost magical effect on bears, sapping their strength as soon as the price falls below it.
On the other hand, the 100-day MA has reproduced the same performance on the resistance-side of the scale. It has already denied the bulls twice.
All this indecision was punctuated and underlined by a doji pattern which formed on Monday.
The recent move below the 50-day MA does not as much signal bearish strength, as it does bullish weakness. Even through these last couple of days, it was obvious that a breakout from the 50-day MA/100-day MA range would most probably occur downwards, thus signaling the resumption of the most recent selloff.
The daily charts add quite of bit of credence to this likely course, as their 5-day and 10-day MAs are both decidedly bearish. Unfortunately for the bulls, the same is true for all the other major MAs.
Technical indicators in general are heavily bear-biased too. Some 16 of them point to “sell”, 9 are neutral and only one points to “buy”. The Moving Averages are very categorical in this regard: 14 of them point to “sell” and not even one to “buy”.
The only indicator bucking the trend is an oscillator, the Momentum (10) one, which is the lone one to say “buy”.
What about the fundamentals?
Cryptocurrency news have been trickling in at the usual pace over the last week. There hasn’t really been anything special in regards to bitcoin and the overall blockchain vibe has been a positive one.
While continuing to keep an eye on cryptocurrencies and the blockchain vertical as a whole, US regulators do not aim to suppress the industry and the innovation it generates.
The heads of various US agencies, such as the CFTC, and the SEC held a panel discussion on the matter yesterday, and they all agreed that they weren’t for the stifling of the vertical in any shape or form. They also came out against government interference, but they did make it clear they were expressing their personal positions and not those of the agencies they represent.
In other news: bitcoin unicorn club member Circle have announced their intention to launch a blockchain-based USD coin, a virtual asset that would be backed as well as regulated by a government-issued currency. Such an asset would certainly provide a valuable anchor for the industry, replacing USDT in this role.
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