KEY BITCOIN TAKEAWAYS
- Bitcoin exploded past $61,000 during the weekend session to hit a new record high.
- The cryptocurrency failed to hold the upside momentum as profit-taking intensified.
- It is now trading about 9 percent lower from its sessional top and has hinted at further downside risks after forming a death cross.
The cost to purchase one Bitcoin surged by more than 43 percent after bottoming out near $43,000 in February.
Traders unwinded their exposure in the Bitcoin market ahead of the Federal Reserve’s two-day policy meeting ending Wednesday — a high-impact event. The central bank officials would discuss whether or not to intervene while the yields on longer-dated US Treasurys rise. A no-intervention policy could send the Bitcoin prices lower as rising yields make holding/buying the US dollar more attractive.
So it appears, traders anticipated the move ahead of the meeting’s conclusion. Bitcoin dropped by almost 9 percent after setting up its record high. Nevertheless, the cryptocurrency avoided a steeper sell-off in hopes that stimulus beneficiaries would raise their bids on the BTC/USD rates.
In retrospect, Death Crosses appear when an asset’s short-term moving average slips below its long-term moving average. This week, Bitcoin’s 20-4H exponential moving average closed below its 50-4H simple moving average. The said 20-50 crossover has historically served as a predictive sell-off indicator, which increases risks of further declines in the Bitcoin market.
Meanwhile, a rising trendline slope provided intermediate support to Bitcoin’s bullish bias. A rebound from the price floor could have traders increase their bids for the horizontal resistance above—at around $58,000. An extended move upward would have Bitcoin restest its previous record high.
“Bitcoin still putting in an uptrend on the daily chart,” said Josh Rager, the co-founder of Blockroots.com. “Trendlines are meant to be broken. But as long as [the] price is above $50k (above the previous range), I think this continues to push back up to new highs. People will be calling “the top” at every pullback so get used to it.”