BTC Nearing An Inflection Point On Technicals
Bitcoin, the largest cryptocurrency by market capitalization, is nearing a critical inflection point in terms of technical indicators.
After China declared all crypto transactions as “illegal” last week, the controversial asset tumbled heavily; cracking below the 40K USD mark before resurrecting itself to around 44K levels as on date.
Last week’s breakdown saw BTC breaching the lower Bollinger Band mark on the 21st September, which is as clear a bearish signal as they come. Couple this with the fact that it hit a wall at the 20DMA level a few days prior, and the future outlook appears bleaker and bleaker for the asset that John Paulson famously called out as “a limited supply of nothing” in an interview earlier this month.
BTC is set to face very stiff resistance at the 20DMA level, which currently stands at USD 45,200. If it does not find support and break past that level decisively, we will likely see prices tumbling sharply to 35K USD or below in a short span of time if it fails to hold the critical support level of 40K USD which marks the 20 WMA level for the coin.
On the weekly charts, BTC made a lower high in the week of 6th September when it failed to gather enough steam to go past its April highs. With that in mind, a lower low compared to June’s sub 30K levels may well be in the offing.
Retail investors dabbling in cryptocurrencies through new age platforms are advised extreme caution at these levels, as BTC (and all other cryptos) appear to be nearing a pivotal level.
