Bitcoin Soft in the Aftermath of Last Week’s Plunge
The popular cryptocurrency comes from six consecutive negative weeks and the second worst of the year, during which it plunged to the lowest level since December 2020 (25,398), amidst the broader Cryptocurrencies rout.
Bitcoin was able to muster support after that low, but the recovery effort is failing today, at key technical levels, amidst broader risk-off mood that works against it. It rejects the critical 38.2% Fibonacci of its last leg down form this month's high to the lows, that could lead to further weakness.
Below this level, there is risk for new lows towards 24,151 region, although it may be a stretch at this point to talk about a sub-20,000 retreat.
On the other hand, the US Dollar does not seem particularly lively today and BTC/USD may find the opportunity to extend its recovery, to 50% Fibonacci (32,703). However, a significant change in sentiment would be required for a relief rally towards 36,600-37,600 and the EMA200, which looks like a toll order under current conditions.
Caution is required after last week's developments, while volatility is still elevated, as markets monitor various risk factors, including prospects of increased Crypto regulation.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
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