The pair will likely keep falling as many investors start taking profit.
Sell the FTSE 100 and set a take-profit at 44,000.Add a stop-loss at 47,000.Timeline: 1-2 days.
Set a buy-stop at 46,500 and a take-profit at 48,000.Add a stop-loss at 44,000.
The BTC/USD pair retreated slightly on Monday and Tuesday as last week’s spectacular rally took a breather. The pair fell to a low of 45,600, which was substantially lower than last week’s high of 48,220. It remains about 33% above the lowest level in February this year.
Bitcoin Rally Fades
Bitcoin and other cryptocurrencies had a strong performance last week a investors reacted to rumours that Russia will start accepting the currency for its gas sales. The country has not yet confirmed whether such a measure is in play. Instead, the government has insisted that it will only accept rubles for gas purchases.
The BTC/USD price action has also diverged with that of American stocks. In the past few days, American shares have continued their bullish trend as investors continue buying the dip. On Monday, the Nasdaq 100 and S&P 500 indices rose by more than 0.50%.
This price action is also likely because of profit-taking considering that Bitcoin has been in a strong bullish trend. At its peak last week, it had jumped by over $15,300 from its lowest point this year.
Meanwhile, countries are gearing to implement more regulations in the cryptocurrencies sector. On Monday, the UK government that it had set out a detailed plan to exploit the potential of crytoassets and their underlying technology.
The government hopes to create a global crypotoasset hub. The move is meant to attract most companies in the blockchain industry. The same trend is happening in other countries like the United States and France.
The BTC/USD pair also declined as investors continued to worry about Tether, the giant stablecoin. According to the WSJ, short-sellers have placed bets that the price of Tether will fall. Such an action would have major implications considering that it has over $82 billions in assets.
The BTC/USD pair peaked at about 48,228 last week. After that, the pair declined and reached a low of 44,310 during the weekend. It has already moved below the important support at 45,396 and the 50-day volume-weighted moving average (VWMA). The Relative Strength Index has also moved close to the oversold level of 30.
Therefore, the pair will likely keep falling as many investors start taking profit. If this happens, the next key support level to watch will be at 44,000. A move above 47,000 will invalidate this view.