Bitcoin technical analysis

Bitcoin technical analysis

2019-11-11 • Updated

The price of the world’s main cryptocurrency keeps falling. BTC/USD fell from the $11,600 area where it traded at the end of January to the vicinity of $6,000 on Tuesday, February 6.

Bitcoin is in a firm downtrend. The double top formed on the chart in December and January, suggests that decline may stretch as low as to $4,300. Daily and weekly MACD indicators signal further downside. In addition, BTC/USD broke yesterday below the 200-day moving average for the first time in more than two years. This line will now act as resistance at $7,900. Bitcoin also went below the trend line connecting the lows of January 17 and February 2 (it’s located in about the same area as the 200-day MA). BTC/USD has to return at least above this area to give bulla a chance to reverse the satiation.

BTCUSD.png

It’s clear that the cryptocurrency market is in desperate need of new monetary inflows. Yet, for now the sentiment seems to be negative. Bitcoin market capitalization declined from $294 billion on January 7 to $139 billion on February 5.

Why is Bitcoin falling?

Bitcoin’s price is affected by negative news flow. Fears of regulatory prohibitions led to the decline in Asian trading volumes. According to local media, China will reportedly block anyone in the country from accessing websites that offer cryptocurrency trading services or initial coin offerings (ICOs). 

Bloomberg reported that the heads of CFTC and the SEC will ask the Congress to consider federal oversight for digital-currency trading platforms. 

Many major commercial banks announced that they would ban the use of their credit cards to buy Bitcoin and other cryptocurrencies. These banks include JPMorgan Chase, Bank of America, and Citigroup in the United States and Lloyds bank in the United Kingdom.

The market’s risk sentiment in general suffered this weak as world stocks experienced big selloffs.

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