Key Takeaways
- Bitcoin fell to its lowest degree in seven weeks on Tuesday, giving again the beneficial properties posted at the finish of final week after Fed Chair Powell opened the door to a reduce in rates of interest.
- After hitting its new all-time excessive on Aug. 14, the cryptocurrency has reversed course, doubtlessly laying the groundwork for a bull entice—a buying and selling occasion the place costs rise, earlier than reversing sharply, leaving traders with an sudden loss.
- Buyers ought to watch key assist ranges on Bitcoin’s chart round $107,000 and $100,00, whereas additionally monitoring resistance areas close to $117,000 and $123,000.
Bitcoin (BTCUSD) fell to its lowest degree in seven weeks on Tuesday, giving again the beneficial properties posted at the finish of final week after Fed Chair Powell opened the door to a cut in interest rates.
The legacy cryptocurrency has come below strain not too long ago as some giant traders have reportedly liquidated positions and bitcoin ETF outflows have elevated. Bitcoin has fallen about 12% since hitting a document excessive of above $124,000 on August 14. The digital forex fell as low as $108,700 this morning, its lowest degree since July 9.
Below, we take a more in-depth take a look at Bitcoin’s chart and use technical analysis to determine worth ranges that traders will possible be watching out for.
Potential Bull Lure Emerges
Since hitting its all-time excessive lower than two weeks in the past, bitcoin has reversed course, doubtlessly laying the groundwork for a bull trap—a buying and selling occasion by which costs rise earlier than reversing sharply, leaving traders with an sudden loss.
It’s additionally value noting that as the pioneer cryptocurrency made a brand new excessive, the relative strength index made a relatively shallower excessive to create a bearish divergence between the worth and indicator, signaling waning shopping for curiosity.
Let’s determine two key support levels on bitcoin’s chart to observe if the worth continues to say no and likewise level out resistance areas value monitoring throughout doable restoration efforts.
Key Help Levels to Watch
The primary decrease degree to observe sits round $107,000. Buyers might search to build up BTC close to the outstanding December and January peaks, an space on the chart which will flip from prior resistance to future assist.
Promoting under this degree might see a retracement towards the carefully watched $100,000 space, at present just under the upward sloping 200-day moving average (MA). This location would possible appeal to shopping for curiosity close to a horizontal line that connects a spread of corresponding buying and selling exercise on the chart between November and June.
Resistance Areas Price Monitoring
Throughout restoration efforts, traders ought to hold observe of the $117,000 space. The cryptocurrency might encounter promoting strain on this location close to final week’s failed retest of the 50-day MA and a sideways trend that fashioned on the chart in the second half of July.
Lastly, a bullish reversal again to the upside could spark a rally towards $123,000. Buyers who’ve purchased BTC throughout the present pullback might search exit points close to this month’s closing excessive, which additionally carefully aligns with final month’s excessive.
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As of the date this text was written, the writer doesn’t personal any of the above securities.
