BTC prices fell sharply in the prior week as the Evergrande debt crisis sent shockwaves across global capital markets. Meanwhile, several investors continue to buy the dip in BTC prices above the $40,000 psychological zone, oblivious to the current dynamics in the crypto market and the fact that BTC is unwilling to profit from the risk-off sentiment. However, the world’s largest cryptocurrency continues to profit from safe-haven demand, as investors believe the growth seen in recent months can be sustained. After a string of losses in September amid China’s crypto ban, Bitcoin rebound from a monthly low of $39,600 stays higher. BTC/USD has gained 5% in the last 24 hours and is currently trading near $44,000. The People’s Bank of China declared “virtual currency derivative transactions” illegal and “strictly prohibited”, sending crypto prices lower. A statement signed by Chinese government agencies earlier this month spelled out a severe new policy, enforcing a prohibition on crypto mining, trading, and financial activities.
Key Levels
Resistance Levels: $50,000, $47,000, $45,000
Support Levels: $43,000, $40,000, $37,500
BTC/USD Daily Chart: Ranging
BTC/USD Daily Chart
Over the week, Bitcoin hovered in a narrow trading range as both volatility and volume fell sharply. With the rebound from $39,600 staying higher, Bitcoin must sustain today’s daily candle above the $44,000 level of resistance to avoid a series of lower highs and lower lows. If not done, downside pressure could return, with downside price targets of $42,000 and $37,500.
A daily close past the $43,000 indicates that the bull market has begun while the $39,600 low was a bear trap rather than a negative reversal. If bulls re-enter the market, the correction should be restricted to the first resistance level at $45,000 in the upward direction. The focus of investors today will be on closing well over $43,000/$44,000 levels.
BTC/USD 4-Hour Chart: Ranging
BTC/USD 4-Hour Chart
BTC/USD is back above the 4-hour moving average (MA 50) breaking through the $43,000 resistance line, which has now become near-term support. Given that the Relative Strength Index indicator for the pair is back above its midline 50. The majority of investors prefer to keep an optimistic outlook for BTC, despite some hints of instability.
If the selling pressure returns, the pair might aim for, if not break, the $40,000 support line while a higher break could see Bitcoin break the $45,000 psychological barrier, clearing the way for the $48,500 barrier. Overall, only a successful breach of the goal at $45,000 might cause market participants’ current sentiment to shift bullish.
Note: Kryptomoney.com is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results
Image Credit: Shutterstock
