Bearish view
- Sell the BTC/USD pair and set a take-profit at 35,000.
- Add a stop-loss at 37,800.
- Timeline: 1-2 days.
Bullish view
- Set a buy-stop at 37,800 and a take-profit at 39,000.
- Add a stop-loss at 36,000.
Bitcoin price retreated on Tuesday and Wednesday morning after a series of important regulatory stories in the industry. The BTC/USD pair dropped to a low of 36,260, which was much lower than the year-to-date high of 38,000.
Regulatory concerns remain
There have been several important crypto-related stories this week. On Monday, the Securities and Exchange Commission (SEC) sued Kraken, a leading American crypto exchange.
In the lawsuit, the agency said that Kraken operated as an unregistered securities business and that it mixed its customer funds with its own. By doing that, the SEC alleged that the company put these funds at risk. Kraken has vehemently rejected these claims.
The other big regulatory news came out on Wednesday when the SEC settled with Binance and Changpeng Zhao (CZ). In it, the two pleaded guilty for a number of allegations. CZ will also step down as the CEO of Binance, the biggest company in the industry.
Binance still faces legal challenges from the CFTC and the Department of Justice. Still, the settlement is a welcome move since this lawsuit has been a major risk in the crypto industry for a while. Therefore, this settlement means that the company can continue operating.
It also raises the possibility that Coinbase and Kraken could also reach a settlement in the coming months.
The BTC/USD pair also retreated after Bittrex, a leading crypto exchange announced that it was shutting down. In a statement, the company did not explain the reasons for its decision but data shows that its trading volume had dropped in the past few months.
Bitcoin tends to drop after a major negative event and then bounce back. It crashed hard following the collapse of FTX and has now surged by over 100% from its lowest point in 2023.
BTC/USD technical analysis
The BTC/USD pair retreated after reaching a high of 37,800 on Tuesday. On the 4H chart, it remains inside the ascending channel shown in black. It is consolidating at the 50-period and 25-period Exponential Moving Averages (EMA).
The Relative Strength Index (RSI) has moved below 50. A closer look shows that it has also formed a triple-top pattern, which is usually a bearish sign. The neckline of this pattern is at 34,740, the lowest point on November 14th.
Therefore, the outlook for the pair is bearish, with the next point to watch being at 34,738. This view will be confirmed if the price moves below the lower side of the ascending channel. The alternative scenario is where the pair bounces back and moves above this week’s high of 37,800.
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