BITCOIN : Bulls refuse to Surrender

(Thu, 28 Jan 2021).

BITCOIN (BTC/USD) SITS COMFORTABLE AT CRITICAL SUPPORT

Bitcoin prices continue to consolidate as momentum appears to have stalled at an important level of support. Despite falling approximately 25% since reaching the historical high of $41,000 earlier this month, the first major cryptocurrency has still soared a staggering 228% since January 2020. Although US Dollar weakness helped buoy gains for Gold, Silver and other safe-haven assets, Bitcoin and its Ethereum (ETH) counterpart appear to have taken on a similar role. However, the ‘Bitcoin Bubble’ is still under speculation and fears of a reoccurrence of 2017 events may be difficult for some to forget.

BITCOIN (BTC/USD) TECHNICAL ANALYSIS

From a technical standpoint, BTC/USD is now resting at a critical level of support, formed by the 50% Fibonacci retracement level of the short-term move (Nov 2020 – Jan 2021) at $29,056. This level has played out on numerous occasions, with the formation of a descending triangle now coming into play, while testing the lower bound of the Bollinger Band. However, the Commodity Channel Index (CCI) is currently lying below -100, suggesting that the digital currency may be oversold. If prices manage to fall below the 50 Day Moving Average and break through current support, bears may able to push prices lower towards the Dec 2020 levels around $22,000 in the near-term. On the contrary, if bulls can take charge, then it may be open the door for bullish continuation towards the psychological level of $40,000.

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