Up until yesterday, it looked like smooth sailing for Bitcoin, as it continued to climb higher within a rising channel, drawn from the low of the 14th of August. But everything changed following news that Goldman Sachs is postponing plans to create a crypto trading desk. This, together with headlines that one of the major crypto trading platforms will have to ask users for some personal information, had spooked buyers and led to a strong sell-off.
During the Asian morning today, Bitcoin tumbled below the lower bound of the aforementioned channel, which indicates that there could be some more weakness to come. The crypto found support near the 6215 level, from which it slightly rebounded back up. If Bitcoin breaks this level, this could open the path towards its historic support area between 5870 and 5750, which held the price strongly from going lower for almost a year. This could be the area where the crypto could stall for a while, until the bulls and the bears decide over who takes control from there.
Certainly, let’s not exclude the possibility for BTC/USD to retrace back up a bit, before it could head lower again. An important area of resistance to monitor could be the 6625 zone, as it played its part of acting as both support and resistance, in the recent past. This could be a good entry point for the bears in order to drive the crypto lower again, towards the abovementioned levels.
The RSI is currently supporting the idea of a possible retracement back up, as it has bottomed near the 20 mark and is pointing up. That said, the MACD is giving us an opposite indication, as it lies below both its zero and trigger lines.
For us to get comfortable with a more decent recovery than just a corrective rebound, we would like to see a strong move back into the previously mentioned rising channel and also a break above the 7125 barrier, marked by the high of the 29th of August. If such a move happens, this could open the way towards Tuesday’s highs, near the 7400 hurdle, a break of which could send Bitcoin to test the 7700 level, marked by the high of the 2nd of August.
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