The pair will likely break out lower as investors target the key support at 42,858, which was the lowest level this week.
Sell the BTC/USD pair and set a take-profit at 42,800.
Add a stop-loss at 48,000.
Timeline: 2 days.
Set a buy-stop at 47,000 and add a take-profit at 50,000.
Add a stop-loss at 44,000.
The BTC/USD price declined for the third straight day as sentiment in the cryptocurrency industry waned. The pair is trading at 45,822, which is about 13% below the highest point this week and about 7% above the lowest level. This brings the coin’s total market capitalization to more than $862 billion, making it one of the biggest platforms in the world.
Bitcoin Momentum Wanes
The BTC/USD pair is under intense pressure after its almost 17% decline on Tuesday. This sell-off started shortly after El Salvador embraced the cryptocurrency and bought about $20 million worth of it. This was a relatively smaller amount than most market watchers were expecting.
As the price dropped, many traders exited their trades, fearing that the coin would drop to the recent lows of about $30,000. The sell-off slowed down in the overnight session even after a tussle emerged between the Securities and Exchange Commission (SEC) and Coinbase, the second-biggest exchange in the world.
The SEC has subpoenaed Coinbase in relation to a new investment product that the company plans to launch. The agency has also threatened that it will sue the firm if it goes ahead and launches the service. These actions mean that the SEC is attempting to use existing laws to reign in cryptocurrencies.
Meanwhile, the BTC/USD is in a sell-off as risks of more regulations emerged. This week, Senator Elizabeth Warren warned regulators and Congress against complacency about cryptocurrencies. She noted that the industry posed significant risks to customers if it was not properly regulated. Precisely, she noted about the decentralized finance (DeFi) ecosystem, which she noted was acting as a shadow banking enterprise.
The stronger US dollar has also affected the overall performance of the BTC/USD. The US Dollar Index has jumped by almost 1% this week even after the mixed American jobs numbers.
The two-hour chart shows that the BTC/USD price bearish momentum has lost steam. The pair is trading at 45,822, which is in the same range where it was yesterday. This price is slightly below the key resistance level at 46,320, which was the lowest level on August 27.
It also seems like it is forming a bearish pennant pattern that is shown in black. Therefore, the pair will likely break out lower as investors target the key support at 42,858, which was the lowest level this week.