- A three-day rally that brought the price of bitcoin close to $ 10,000 on Thursday caused a turnaround in profit taking.
- Cryptocurrency fell to a low of $ 9,226 on the U.S. cryptocurrency market on Friday. United States Coinbase, although it rebounded strongly during the European trading session.
- The price movement slowed when the US stocks futures. United States They slipped over worries of the trade war, the Fed's warning of weak economic growth and rising unemployment claims.
Bitcoin jumped to $ 10,000 on Thursday, but has not been able to secure the bullish territory for a longer period of time.
The benchmark cryptocurrency rose 16.15% in three days to reach $ 9,943 on Coinbase. The level offered daily traders opportunities to extract short-term gains. The capitulation occurred during Friday's European trading session, with prices as low as $ 9,226.
BTCUSD operates near the confluence of resistance | Source: TradingView.com, Coinbase
Technical readings on the Bitcoin daily chart showed the cryptocurrency near a confluence of resistance. The red bars, as shown in the table above, represented areas with a higher sense of sales. The current block contained a long-term downtrend line that limited the price of further upside. It also contained $ 10,000, a level of psychological resistance.
Bitcoin retraced after testing the red zone as its local high, returning to its intraday lowest at $ 9,226. But a favorable buying sentiment near the local low helped set the price above $ 9,500, indicating a possible new test for the red bar.
Fed Hype
Bitcoin's exponential gains earlier this week came after Warning from the chairman of the Federal Reserve, Jerome Powell, regarding "deeper and longer recessions" in the American economy. United States
. Trading experts expected a dismal market outlook, a sentiment that pushed US stocks down on Wednesday.
A day later, the United States Department of Labor. United States He published another bad news on the market. Their latest unemployment data shows that the number of unemployment claims has risen to 36.5 million. Bitcoin has maintained its revenue around the ad. The Dow Jones, the S&P 500 and the Nasdaq Composite fell.
However, the Wall Street indices rose dramatically before the New York closing bell on Thursday. Around the same time, the price of bitcoin began to correct itself lower.
Starting today, US equity futures. United States They hinted that they would open lower. The Wall Street Journal said it was due to commercial fears.
What's the next step for Bitcoin?
Bitcoin was trading 1% higher until Friday, hoping to retest $ 10,000 as temporary resistance. But the cryptocurrency lacked volume to cross the downtrend line: a break above could declare a bull market in the medium term.
Later, the BTCUSD could maintain the floor at $ 9,500 or more, thereby maintaining its short-term upside bias. However, a move below the level could lead to a prolonged decline towards 8,000 to 8,100 dollars (the 200-day moving average orange curve).
Meanwhile, a deeper correction in the US stock market. United States This could increase the downside risks to the bitcoin market. It has nothing to do with correlation, but rather the tendency of investors to sell profitable cryptocurrency to cover their losses compared to traditional assets.
photo by Muzammil Soorma in Unsplash