BTC/USD Forex Signal: Bitcoin Struggling to Find Direction

Crispus Nyaga

The pair will likely bounce back in the near term as bulls target the resistance at 35,000.

Bullish View

  • Set a buy stop at 34,000 and a take profit at 36,000.
  • Add a stop-loss at 32,000.
  • Timeline: 1 day.

Bearish View

  • Set a sell-stop at 33,700 and a take-profit at 32,000.
  • Add a stop-loss at 35,000.

The BTC/USD pair was little changed during the Asian session as traders paid close attention to the ongoing ransomware attack. It is trading at 33,880, which is about 5% below the highest level yesterday. It has a market capitalization of more than $634 billion.

Kaseya Ransomware Attack

Bitcoin price declined as a major ransomware attack continued around the world. Russian hackers known as REvil have done a supply-side attack on Kaseya.

Kaseya is an IT firm that provides software updates to thousands of companies globally. These customers then provide their services to other companies. Therefore, while the hack has affected 40 of the 30,000 Kaseya customers, the impact has been significant. According to the Wall Street Journal, the hackers have demanded north of $70,000,000 in ransom. This is the biggest ransom ever asked.

Therefore, as the number of ransomware attacks increases, there is a possibility that regulators and policymakers in the United States will intervene. Such strict regulations will likely have a negative impact on cryptocurrencies. Still, some analysts believe that regulations will be better for Bitcoin and other genuine cryptocurrencies.

The BTC/USD is also reacting to news that retail and institutional demand for the coins is falling. Recent data shows that the number of active Bitcoin wallets has declined by double digits and are at the lowest they have been in the past two months. This on-chain data is usually a sign that demand for the coin is easing as its price remains more than 50% below its all-time high. Institutional investors who are important for its adaption have stayed in the sidelines also because of ESG concerns.

BTC/USD Technical Analysis

The 30-minute chart shows that the BTC/USD has been in a consolidation phase recently. This is evidenced by the fact that Bitcoin is trading at the same level as the 25-day moving average while the two lines of the MACD are at the neutral line. Further, the Average True Range (ATR) has also dropped.

Meanwhile, the coin is slightly below the first support of the Andrews Pitchfork indicator and is at the same level as the 61.8% Fibonacci retracement level. It has also formed a small inverse head and shoulders pattern.

Therefore, the pair will likely bounce back in the near term as bulls target the resistance at 35,000. On the flip side, a drop below 33,600 will invalidate the bullish view.

BTC/USD

Crispus Nyaga
Crispus Nyaga is a financial analyst, coach, and trader with more than 8 years in the industry. He has worked for leading companies like ATFX, easyMarkets, and OctaFx. Further, he has published widely in platforms like SeekingAlpha, Investing Cube, Capital.com, and Invezz. In his free time, he likes watching golf and spending time with his wife and child.

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