Bitcoin Fails to Break Key Resistance
Where Are the Cryptobulls Bulls?
The flagship cryptocurrency recovered from $30,000 lows but recent gains are now evaporating as $40,000 is proving too strong for the bulls to break. Currently, BTC is changing hands for 36,600 US Dollars per unit but that price may not be available for long and the pair seems prepped for another trip to $30K.
So, who is the culprit for the massive slide that started above $60K? According to Cathie Wood, the founder and CEO of Ark Invest (a well-known investment management firm headquartered in New York), it’s Elon Musk and the ESG (environmental, social, and governance) movement. During CoinDesk’s Consensus 2021 conference she expressed the opinion that “It was precipitated by the ESG movement and this notion, which was exacerbated by Elon Musk, that there are some real environmental problems with the mining of bitcoin. A lot of institutional buying went on pause”.
If indeed institutional buying is “on pause”, the slide may extend below $30,000 because retailers lack the strength to really move Bitcoin’s price, not to mention that they are more easily influenced by FUD. But on the other hand, SkyBridge and Fidelity, two U.S.-based companies, have filled applications looking for approval for Bitcoin ETFs, and currently the U.S. Securities and Exchange Commission (SEC) is reviewing these two BTC products.
Of course, we don’t know what the other “big boys” are doing and what investments they are committing to, but the fact is that currently, all top cryptos are in the red, many of them with double-digit losses. Binance’s BNB is down 11.45% in the last 7 days, trading at $338; Ethereum lost only 5% in the last 7 days, now at $2,560, while DOGE is down almost 17% and Ripple’s XRP is down more than 20%.
Chart Analysis – BTC/USD
On the Daily chart below we can see two candles that touched or came very close to the support at $30,000 and then immediately retraced higher, showing signs that price may be headed north. But although that was the case for a brief while, the resistance at $40,000 proved too strong for the bulls to break, and currently, price has resumed its downward trajectory.
Considering this price action, the next probable destination is the support at $30,000 and a break of this barrier would significantly affect medium-to-long-term movement. The MACD is headed south but its lines are closer together, which shows a diminished bearish momentum, and the RSI is also headed south but it’s approaching oversold territory (30 level). These are small signs that we may see some sort of bounce higher from support levels identified on the lower timeframes but as long as price remains below $40,000, the bias is bearish.
