Yahoo Finance BTC Back to $54,000 After Failure at Resistance?
Bitcoin (BTC/USD) looks set to snap a three-day win streak this Tuesday as it pulls back from Monday’s highs above $58,000 per coin to current levels in the $57,000 region. That translates to a market capitalisation of currently around $1.08T. The cryptocurrency appeared to find strong resistance at the start of the week at a key downtrend that has been acting as either support or resistance since last October.
Volumes subdued
Volumes are showing some signs of picking up since the weekend lull. According to CoinMarketCap, trading volumes over the last 24 hours were slightly more than $32B, roughly 8% above the volumes traded over the prior 24-hour period. But trading volumes are still below last week’s Monday-Friday average of roughly $37B, however.
There are some important macroeconomic events coming up this week that could trigger volatility in crypto markets, including remarks from a host of US Federal Reserve policymakers, including the Chairman of the Fed Jerome Powell on Tuesday and Wednesday, as well as the official November US jobs report on Friday. Markets are also closely watching Omicron headlines for more information on its transmissibility, vaccine resistance and severity of illness. Recall that last Friday, Omicron fears triggered a broad downturn in crypto markets in tandem with losses seen across “risk-assets” like stocks and most commodities.
It thus makes sense that volumes are a little lower than usual, with crypto markets in wait and see mode. In the meantime, failure to break about the downtrend and hold above $58,000 likely signals that the next move for BTC back towards last week’s lows around $54,000. The $53,000-$54,000 area has been an important area of resistance turned support since September.
BTC short-term momentum turning bearish?
BTC’s 21-day moving average ($59,900ish) slipped back below its 50DMA ($60,750ish) over the weekend, a sign that the cryptocurrency’s short-term momentum continues to wane and in fitting with the recent failure to break above a key downtrend.
Looking at alternative momentum indicators such as the Relative Strength Index; neither the 14-hour of 14-day, which clocks in at just under 50.00 and just above 44.00 respectively, a signal that conditions are becoming over-stretched. In other words, there is plenty of room for further selling (or buying) before BTC becomes oversold (or overbought).
With support in the $54,000 area holding firm for now, but prices continuing to be squeezed by the aforementioned downtrend, BTC/USD is arguably forming a descending triangle, a signal that a downside break is on the cards.
If support in the $53,000-$54,000 area was to go, that open the door (from a technical perspective) to a continued pullback all the way back down to $40,000. Below that, the next key area of support resides around $30,000.
This article was originally posted on FX Empire
