Choppy Session in Play!
The BTC/USD was closed at $53,264 after placing a high of $57,147 and a low of $53,264. Bitcoin failed to surpass the $60K level and came back to test the resistance level that dragged its prices lower on Tuesday. Bitcoin also faced pressure on Tuesday as its rival Ethereum was reaching its new all-time high level above $3400 and was challenging the dominance of Bitcoin in the cryptocurrency market. The failure to break the resistance level also added further pressure on BTC/USD prices and dragged them lower on Tuesday. Furthermore, the latest comments from U.S. Treasury Secretary Janet Yellen about a potential rise in the U.S. interest rates dumped the global stock markets and Bitcoin. Yellen signalled that Joe Biden’s administration might be aiming to raise interest rates as a way to save the economy after the imbalance caused by measures to fight the coronavirus pandemic.
Another reason behind the falling prices of Bitcoin could be the strength in the U.S. dollar on Tuesday. The U.S. Dollar Index rose and reached a 91.39 level on the day amid the risk-off market sentiment despite the declining U.S. Treasury yields. The strength in greenback weighed on Bitcoin as they are negatively correlated and dragged BTC/USD on the downside.
On the flip side, the 23-year old Nigerian professional footballer Achara said that he collects half of his salary in Bitcoin through a third-party exchange service called Bitwage. He said that the major reason behind this move was the rising inflation in his home country. He pointed to the U.S. money printing practices and stated that this was further devaluing the Nigerian naira, so he preferred sending Bitcoin as a substitute for fiat currency to his family in Nigeria.
The CEO of Binance Changpeng Zhao said that cryptocurrencies like Bitcoin and Ether would co-exist for a while with more restrictive digital currencies like China’s digital yuan. He added that some of the key features of cryptocurrencies like Bitcoin’s freedom of use and limited supply would not be offered by central bank digital currencies. These were the core properties that users care about. These comments from Zhao supported cryptocurrencies but failed to reverse bearish momentum in BTC/USD.
BTC/USD Intraday Technical Levels
Pivot Point: 54558.3
BTC/USD - Technical Outlook
On Wednesday, the BTC/USD is trading at 54,287 level, maintaining a sideways trading range of 52,255 – 56,452. Currently, the BTC/USD pair is holding in above a support level of 52,255 level. The 20 and 50 periods EMA (Exponential Moving Averages) support a bearish trend; therefore, the bear power stays strong below 56,452 trading levels. On the 4 hour timeframe, the BTC/USD pair has also completed 38.2% Fibonacci correction at 56,450. Above this, the pair’s next resistance stays at 56,450. The leading indicators demonstrate a strong selling bias as the RSI remains at 39.50 and the MACD at -354 levels. The BTC/USD pair’s support stays at 53,335 levels. Below these levels, the BTC next support holds around 47,736. Conversely, the violation of 56,450 resistance exposes Bitcoin towards resistance areas of 59,966. All the best!
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