BTC/USD Analysis - April 20, 2021

Descending Triangle Pattern

The BTC/USD was closed at 55639 after placing a high of 57359 and a low of 54912. Bitcoin continued its bearish momentum for the 4th consecutive session on Monday and dropped below 55,000 level. Bitcoin fell on Monday against the US dollar after dropping precipitously over the weekend in a flash crash. After reaching an all-time high near $65,000 last week, the cryptocurrency saw a steep decline and dropped more than 10K in value in just three days. It has dropped more than 20% over the weekend and is continuously declining and damaging the companies holding Bitcoin like Tesla, a key holder of the famed crypto, fell by 4%. The Coinbase that made its public appearance last week also dropped by 3%.

One of the cited reasons behind the decline of Bitcoin is the noise made by countries like Turkey that banned Bitcoin and other cryptocurrency payments and the talks of further scrutiny by the US Treasury. The competition around the crypto market is also expanding, with countries like China creating a digital Yuan. China is playing with the idea of rolling out the currency at the 2022 Beijing Winter Olympics. Furthermore, the Bank of England has recently announced the creation of a Central Bank Digital Currency and a task force to explore its uses. Some analysts believe that the competition of Bitcoin is rising with the tech companies working on their versions of cryptocurrencies, and this has been weighing on the prices of Bitcoin.

Meanwhile, the Deputy Governor of the People’s Bank of China, Li Bo, said that bitcoin and stable coins were encrypted assets and not currency itself. He noted that crypto assets should play a significant role in the future either as an investment tool or as an investment alternative. News like this should swipe off some of the bearish tones from Bitcoin.

On Sunday, the Chief Investment Officer of Arca, Jeff Dorman, gave three reasons for the recent decline in Bitcoin prices. First, there was much confusion about the drop in BTC Hash Rate. Second, various people claimed that high-level Coinbase executives had sold most of their Coinbase shares shortly after its IPO on April 14. Third, the news about the US Treasury charging several financial institutions for money laundering using cryptocurrencies.

BTC/USD Intraday Technical Levels

Support Resistance

54581.6 57027.8

53524.1 58416.5

52135.4 594739.9

Pivot Point; 55970.3 

BTC/USD - Technical Outlook 

The BTC/USD pair trades with a bearish bias at 54,834 level, having from 57,657 level. Previously, the leading cryptocurrency BTC/USD fell dramatically from 61,300 to 46,639 level amid violation of upward trendline and profit-taking by investors. Bitcoin has formed a descending triangle pattern on the hourly timeframe, supporting the leading cryptocurrency pair at 53,300 level and resistance at 55,425. The 20 & 50 periods EMA are pressing Bitcoin prices lower, extending strong resistance at 55,450 area. Simultaneously, the lagging indicators such as MACD and RSI also suggest a strong bearish trend as their values are holding at -405 and 42, respectively. A bearish breakout of 53,350 support level opens up additional room for selling until the next support area of 50,015. All the best!