Bitcoin Set to Bounce off Above $29,300
The BTC/USD was closed at $29914.0 after placing a high of $31075.0 and a low of $29341.0. bitcoin extended its loss and reached below the $30,000 level for the first time in four weeks as the panic selling increased. The sudden drop in bitcoin prices led some analysts to believe that it was the time that price of BTC will fall further. This type of mindset added weight to BTC/USD prices on Monday, and the cryptocurrency dropped below its crucial support level of $30,000.
Meanwhile, the former Goldman Sachs executive Raoul Pal explained the history behind his investment in cryptocurrency. He said that he had invested 55% of his wealth in Ethereum, and he also called this move the biggest, clearest bet of all. Pal was bearish on fiat currencies like the U.S. dollar as he believes that they were continuously declining against assets like real estate, stocks, and crypto.
On the other hand, the JP Morgan Asset & Wealth Management CEO, Mary Callahan Erdoes said that the clients of banking giants see the bitcoin as an asset class and wanted to invest in it. In April, JP Morgan announced that it had plans to allow wealthy clients to invest in bitcoin through a forthcoming managed fund. By doing so, JP Morgan will become the second-largest bank to offer access to bitcoin, followed by Morgan Stanley, which is currently at first rank.
Furthermore, the CEO of Osprey Funds, an issuer of over-the-counter Bitcoin trust OBTC, said that the U.S. Securities and Exchange Commission has many things on its plate in 2021 under the leadership of Gary Gensler that a BTC ETF approval was unlikely to cut. He expected the fund might get approval in 2022 at the earliest but not in 2021. These comments also weighed on BTC/USD and added loss in its prices.
Additionally, the decline in BTC/USD could also be attributed to the rising prices of the U.S. dollar. The DXY (U.S. Dollar Index) rose to its highest level since 28th March at 93.17 level and weighed heavily on BTC/USD as both share a negative correlation.
The U.S. dollar was strong across the board amid the rising risk-off market sentiment due to the concerns regarding the fast spread of the Delta variant of coronavirus. The most contagious and dominant variant of the coronavirus is said to be detected in more than 100 countries throughout the globe. Europe has reached a milestone of 50 million coronavirus cases from a region throughout the world. The U.S. officials reported that the new daily coronavirus cases now consist of about 80% of cases infected by delta variants.
The rising tensions around the globe regarding prospects of slow economic recovery added to the risk-off market sentiment, and hence, riskier assets, including yields, stocks, and cryptocurrencies, suffered. Whereas, safe-haven assets like the U.S. dollar gained attraction and dragged BTC/USD further below the $30,000 level and triggered a massive sell-off by breaking the key support level.
BTC/USD Intraday Technical Levels
Support Resistance
30266.0 31676.0
29685.0 32505.0
28856.0 33086.0
Pivot Point: 31095.0
BTC/USD - Technical Outlook
The leading cryptocurrency, Bitcoin, has traded dramatically bearish at 29,387 levels amid stronger dollar and sell-off in the crypto market. At the moment, the BTC/USD is trading at 29,935 level, having bounced off over 29,385 support level.
On the 4 hour timeframe, Bitcoin has closed series of Doji and Shooting start candles followed by a dramatic bearish trend. Such a pattern demonstrates that sellers are getting exhausted, and bulls may take over the market.
Thus, there's strong potential for bullish retracement. The BTC/USD is heading north to complete 38.2% Fibonacci retracement at 30,150 level. At the same time, the support continues to hold around 29,385 levels. Bullish crossover of 38.2% Fibonacci level can expose Bitcoin price towards 61.8% Fibo levels of $30,380. All the best!
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