BTCUSD, also known as Bitcoin, has been stuck in a sideways trading pattern over the past few sessions. The sentiment surrounding this cryptocurrency has been deteriorating, especially after facing multiple rejections at the 50-day SMA. This lack of upward momentum has caused concerns among traders and investors.
Downside Potential and Key Levels to Watch
In August, BTCUSD experienced a significant selloff following a disappointing July NFP report. Unlike stocks, Bitcoin has struggled to make a recovery, with the 50-day SMA acting as a strong resistance level. If the current rangebound movement breaks to the downside, immediate support levels to watch include the April bottom of 56,483, the July low of 53,250, and the six-month low of 49,450.
On the other hand, if bullish momentum picks up, BTCUSD could test the recent rejection region around 61,850. Breaking above this level could lead to a challenge of the 50-day SMA and potentially the April hurdle of 67,270. Further upside resistance levels might be encountered near the July peak of 70,015.
Short-Term Outlook and Technical Indicators
Despite the sideways trading, the short-term outlook for BTCUSD remains bearish. The death cross between the 50-day and 200-day SMAs has added to the negative sentiment surrounding this cryptocurrency. For a change in this bearish trend, BTCUSD would need to make a significant move above its 200-day SMA, which would signal a potential shift in momentum.
BTCUSD is currently facing challenges in breaking out of its sideways trading pattern. The deteriorating sentiment, coupled with the bearish technical indicators, suggests that further downside potential exists. However, a strong bullish move above key resistance levels could potentially reverse the current trend and bring about a positive outlook for Bitcoin. Investors and traders should closely monitor these developments to make informed decisions regarding their positions.
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