38.2% Fibonacci Correction!
The BTC/USD was closed at $36720.5 after placing a high of $43516.6 and a low of $30261.7. Bitcoin dropped for the 5th consecutive session on Wednesday and reached below the $31,000 level, its lowest since January 2021. The sudden decline in bitcoin prices came after China imposed fresh curbs on cryptocurrencies. Beijing banned banks and payment firms from providing services related to crypto-currency transactions and warned investors against speculative crypto trading on Tuesday.
The news came in after the bitcoin had already fallen about 10% during last week amid a series of negative tweets from Tesla CEO Elon Musk, who said that his company would no longer accept the cryptocurrency to its impact on the environment. To stop money laundering, China banned cryptocurrency and made its trading illegal in 2019. however, people were still able to trade in cryptocurrencies through exchanges and online that raised concerns in Beijing. On Tuesday, three state-backed organizations of China, including the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China, issued a warning on social media against cryptocurrency trading. The warning entailed that consumers would have no protection if they were to incur any losses from crypto-currency investment transactions.
The organizations also added that the recent wild swings in the crypto-market violates the safety of people's assets and are disrupting the standard economic and financial order. Following this news, bitcoin posted the biggest daily percentage loss in more than a year as investors rushed to exit the trades to avoid maximum losses.
Bitcoin has been on a rash ride this year as a growing number of retail and institutional investors were hopeful that bitcoin and other cryptocurrencies would gain mainstream acceptance; however, as bitcoin a digital asset, a large price swing is common. This high volatility was the major reason behind issuing a strict warning against institutions from offering cryptocurrency registration, trading, clearing, and settlement.
Furthermore, the U.S. dollar was also strong on Wednesday as the U.S. Treasury yields on benchmark 10-year note rose to 1.692%, and the U.S. Dollar Index (DXY) also rose to 90.29 level gave strength to the greenback. The rising strength in the U.S. dollar came in after minutes from Federal Reserve's latest meeting revealed that Fed might start discussing taper talks in upcoming meetings. The greenback's strength added further weight on the digital asset bitcoin and dragged its prices on the downside.
BTC/USD Intraday Technical Levels
Pivot Point: 38331.1
BTC/USD - Technical Outlook
The BTC/USD fell dramatically to place a low level of 28,212 on Wednesday; however, the pair has already completed 38.2% Fibonacci retracement. We can see a solid bullish correction in Bitcoin on the daily timeframe as it's now trading right below 40K level. Bitcoin's immediate resistance stays at 40,215 level that marks 38.2% Fibo levels, and above this next resistances stays at 43,999 and 47,740 levels. At the same time, support holds around 36,480 and 32,350 levels today. Bitcoin still remains below 20 and 50 periods EMA levels that place a bearish pressure on BTC/USD pair. Bearish bias seems stronger in 43,150 zones. All the best!
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