Bitcoin failing to break the wall of resistance

By Anju T K, Intern Reporter
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This week, Bitcoin has been attempting and failing to break above important technical hurdles, instead of drifting lower towards a significant turning point.

All week, the cryptocurrency tried and failed to reclaim the $40,000 barrier, demonstrating strong resistance at that level. In addition, throughout the last four sessions, it has attempted to close above its 100-day average line but is struggling with that as well.

Mr. Craig Erlam, a senior market analyst at Oanda, commented that “Bitcoin is back in negative territory after prices ran into a wall of resistance around $40,000, Perhaps profit-taking hasn’t run its course just yet.”

Mr. Erlam further remarked views $36,000 as an important level to watch, as it corresponds to the resistance encountered in late June and early July, as well as a 50 percent breakdown of the move from recent lows to highs.

During New York trading hours, Bitcoin slid as much as 6.1 percent to $37,326. It’s the lowest it’s been in over a week. It brought an end to a three-day losing streak.

However, the digital coin appears to be on the cusp of reaching an inflection point, with its 100-day moving average, latest price, and 50-day moving average all pointing in the same direction.

While recent statements from billionaire Mr. Elon Musk and Ark Investment Management’s Ms. Cathie Wood, as well as speculation about Amazon’s future engagement in the cryptocurrency business, helped Bitcoin soar in recent days, it has now receded as it falls under increased regulatory scrutiny.

Though some analysts predicted a correction, others pointed to a recent drive-by Congress to force cryptocurrency brokers to report transactions to the Internal Revenue Service, a move that could result in some unexpected tax payments.

Meanwhile, US Securities and Exchange Commission Chairman Mr. Gary Gensler hinted that a Bitcoin exchange-traded fund based on futures rather than the cryptocurrency itself would be more acceptable to authorities. The news disappointed many cryptocurrency enthusiasts, many of whom had hoped for a different structure.

Related: China’s central bank vows to keep high pressure on crypto market