Back to articles

F&T: Bitcoin finds strong resistance at $70,000

Share

Bitcoin (BTCUSD) pulled back below $67,000 in a broad market move yesterday. Interestingly, this price action coincided with the Securities Exchange Commission’s (SEC) approval of exchange applications to list spot Ether ETFs, which was recently preceded by a rally in altcoins, of which many are currently seeing profit-taking. In addition to that, it coincided with a similar weakness in the U.S. tech sector that remains highly correlated with Bitcoin and whose potential topping presents one of the biggest threats to the cryptocurrency’s spectacular performance. While Bitcoin may take out all-time highs in the near future, we are significantly less optimistic about it continuing to $90,000 or $100,000. In fact, we are starting to grow increasingly more convinced that investors will find, once again, that markets do not function as exponential growth machines. It may have seemed up until now that wealth could be made out of thin air, but historical precedents show that such optimism often leads to harsh reality checks. The exuberance in the market, fueled by speculative mania, will likely face a sobering correction as underlying economic fundamentals reassert themselves. Therefore, we deem it proper to be highly cautious in the current environment, especially as investors continue to disregard many recessionary signs that eventually lead to risk aversion.

 

The daily chart of Bitcoin (BTCUSD) shows a recent rejection at the channel’s upper bound. Another retest of this resistance is not ruled out.

 

Movements indicated by the 20-day SMA and the 50-day SMA suggest choppy market conditions for the trend’s medium degree.

 

Technical conditions

Daily time frame = Slightly bullish

Weekly time frame = Bullish (losing momentum)

Monthly time frame = Bullish

 

Bitcoin addresses

The number of Bitcoin addresses with balances exceeding 1,000 BTC has been rising over the past week or so. But the opposite has been happening to the number of Bitcoin addresses with balances exceeding 100 BTC.

0
62