There is a possibility that it will bounce back.
- Set a sell-stop at 51,328 (double-bottom level)
- Add a take-profit at 50,000 and a stop-loss at 53,000.
- Timeline: 1 - 2 days.
- Set a buy-stop at 55,000 and a take-profit 58,000.
- Set a stop-loss at 52,000.
The BTC/USD pair is under pressure as sentiment in cryptocurrencies soar. Bitcoin price dropped to $51,328, the lowest level since Sunday this week. At the time of writing, it is trading at $53,290, which is more than 17% below its all-time high of almost $65,000.
Bitcoin Price Slides as Sentiment Wanes
There are several things moving the BTC/USD pair today. First, Thodex, a Turkish cryptocurrency exchange abruptly shut down yesterday. The company cited an unspecified partnership transaction but didn’t explain more.
As a result, users who had their coins in the exchange could not access them. The company said that this lock-up would continue for about five days as the company completes the share transfer. This is notable since the company had a daily volume of more than $1.2 billion, making it one of the biggest players in the country.
The new developments are notable because they came a few days after the CBRT announced that it would ban cryptocurrency trading. It gave users until April 30 to liquidate their holdings. Also, it came a time when the Turkish lira has been under pressure.
The Bitcoin price is also struggling after actions by some banks announced that they will disallow crypto trading. Early this week, HSBC announced that it would bar its users from investing in Coinbase, the giant exchange that went public last week. It has also banned MicroStrategy, a company that holds vast amount of Bitcoins.
In another development, NatWest, formerly known as Royal Bank of Scotland (RBS) said that it would not accept businesses that deal with cryptocurrencies. The bank cited an earlier note by the Financial Conduct Authority (FCA) about the risky nature of the coins.
The four-hour chart shows that the Bitcoin price declined to an important support level. It has formed a double-bottom pattern at $51,328, which was the lowest level on April 28. It was also slightly above the lowest level on March 25. The pair remains below the 25-day and 15-day weighted moving averages (WMA). It is also between the pivot point and the first support of the standard pivot points.
Therefore, there are two main scenarios. First, a move below the double-bottom at $51,328 will be a victory for bears. This will open the possibility of the pair falling to 50,000. Second, in technical analysis, a double-bottom pattern is usually a bullish reversal. Therefore, there is a possibility that it will bounce back.