Forex Analysis:Bitcoin Support Is Seen Towards 7200-7500

Bottom line: Bitcoin long term structure continues to remain bullish against 3850 lows sin…

Bottom line: Bitcoin long term structure continues to remain bullish against 3850 lows since March 2020. The crypto might be underway to produce a meaningful corrective drop towards 7200-7500 levels until it holds below 12500 resistance.

 Fundamental Outlook:

Dow Jones had managed to gain in the past few sessions hitting 27730/50 highs before coming under pressure again. Optimism over another round of stimulus package might have induced the recent rally putting pressure on the US Dollar Index, which dropped below the 94.00 mark yesterday. It would be interesting to see if risk appetite continues to gain momentum.

Bitcoin has slipped to 10750 levels after hitting weekly high around 11000 mark. The crypto remains vulnerable to further drop as US Dollar might gain over the next few weeks. We might witness some strong bids coming in towards 7000-7500 range, going further.

AUDUSD has managed to take off immediate selling pressure after hitting 0.7000 handle over the last week. Since then, the risk associated currency pair has rallied through 0.7150 highs today, alongside global equity markets. The exchange rate might come under pressure again if risk aversion returns.

Technical Analysis:

Bitcoin continues to hold below immediate price resistance at 12000 handle. The crypto had managed to rally towards 11000 levels early this week, before reversing lower again. It trades around 10750 levels as we prepare to publish as bears might be poised to push below 9000 in the near term.

Bitcoin had earlier dropped through 3850 lows, before finding major support. Bulls took control from there and managed to produce a religious rally through 12500 levels. The above rally looks to be an impulse wave, which should ideally be followed by a corrective wave.

Bitcoin bears are looking poised to carve a meaningful corrective wave towards 7200-7500 mark, which is also fibonacci 0.618 retracement of the above rally. High probability remains for a bullish bounce if prices manage to drop through the above support zone.

Most traders might be preparing to initiate fresh short positions around 10700/800 resistance zone, with protective stop above 12500 and potential targets below 7200-7500 levels respectively. Only a break above 12500 would change the above bearish structure.

Prepared by

Harsh Japee, Technical Analyst.

 

Bitcoin Chart

 

Disclaimer:

This market commentary and analysis has been prepared for AT Global Markets UK Ltd (ATFX UK) by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such.

You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.

 Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organizational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients.

The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.

 


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