Bitcoin has fallen to its lowest level since the first week of August. The claims touted by various authorities indicate that the insolvency of the Chinese real estate giant Evergrande is leading to a sell-off.
As analysts scramble to attach a narrative to the sell-off, Bitcoin’s technical picture shows that from this point on, the downside is limited.
Let’s learn more.
As China’s real estate crisis may disrupt the traditional financial system, Marty Bent, co-founder of the Bitcoin mining company Great American Mining, is pleased to hold Bitcoin.
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Bitcoin in the field of correction
Bitcoin is in the correction zone. Last week, we discussed the possibility of a temporary bearish scenario after retesting the $50,000 resistance level.
Since then, BTC/USD plummeted more than expected, and briefly fell below the key January S/R level to 39,600 US dollars.
It’s worth noting that the potential 2-day random RSI Fractal Due to excessive selling pressure, the content mentioned in the previous newsletter has been negated-a lower potential target has been opened in this time frame.
Technically speaking, BTC/USD is slightly below the buying zone, but a bullish reversal in the medium time frame (4 hours) has not been confirmed. This will inspire confidence in a broader relief rebound, which will test the 20-week moving average again.
If the bulls do not appear, one can expect that the main buying pressure will be at the level of $35,000 to $38,000, which various bearish analysts see as a possible reversal area.
The level to watch
- If the $41,000 support level remains unchanged, it is expected to rebound to the 20-week moving average.
- The weekly recovery of $43,600 indicates continued bullishness.
- Otherwise, the buying pressure may reach 38,000 USD and 35,000 USD respectively.
- A decline will indicate a cyclical downward trend-before the HTF mean return is complete, the $30,000 support level may mark the bottom of the foreseeable future.
It is worth noting that the sell-off occurred in the volatility of the traditional financial market and the Evergrande Real Estate The crisis vortex spreads across the financial media. In fact, this crisis reveals what Bitcoin enthusiasts and sound currency advocates have been advocating for more than a decade: the moral hazard of unlimited free money multiplies over time, creating a systemic nature that leads to such events risk.
Although some people will argue that the technical map is the main reason for the drawdown, the fact remains that Bitcoin is considered an emerging asset in the traditional financial sector. Therefore, the debate among investors about whether it is a “wealth reserve” or a “risk” asset still exists for the time being. This may be an important reason why Bitcoin and crypto analysts closely track the S&P 500 and BTC prices (except for temporary price correlations).
In other words, as we have reported many times over the past two years, billionaire hedge fund legends like Paul Tudor Jones and Ray Dalio have found the narrative of “store of value” convincing. Considering that the fundamentals of Bitcoin actually reflect the scarcity supported by the token, this is not surprising—traditional financial managers are not accustomed to this scarcity at all.
Indeed, imagine an asset, it is exactly what it says-totally spiritual in this era!
No matter what happens in the next few days, Bitcoin will usher in an explosive final quarter. Regulators and traditional financial engineers can’t do anything about it.
Pick you up later.
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