Ipek Ozkardeskaya
Swissquote Bank Ltd
The Bitcoin Cash's hard fork on November 15 is believed to be the major catalyst for the sharp decline in Bitcoin prices.
The BTC/USD, which has traded steadily in a wait-and-see mode since two months, broke the solid 61.8% retracement support on August - September recovery (see Figure 1) and shred nearly $1000 within hours. The pair stepped in the oversold market; the daily RSI slipped below 30% following the sharp drop, hinting that a correction could follow in the coming days.
Figure 1: BTC/USDT daily chart
However, the upside could remain limited due to the global lack of appetite in cryptocurrencies and the low trading volumes.
Traders should watch the critical $5978 resistance (major 38.2% retracement on November 15 drop, see Figure 2), which should distinguish between the consolidation of the negative trend and a short-term bullish reversal. But given the current mood, it is highly unlikely that $6000-offers give way to a positive breakout.
On the downside, the next important technical level stands at $5500 (August support).
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Figure 2: BTC/USDT hourly chart
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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