- BTC/USD has recovered from the recent lows, not out of woods yet.
- A strong move above $10,000 is needed to mitigate the initial pressure.
Bitcoin (BTC) has recovered from the recent low of $9,234 to trade above $9,500 by the time of writing. However, despite the recovery, the first digital coin is still down 11% on a day-on-day basis and substantially below psychological $10,000.
While the initial sell-off was caused by Libra hearings in the US Senate, the market seems to have overreacted to the comments of the US senators. Moreover, many politicians are positive about digital assets. Thus former Republican congressman and presidential candidate Ron Paul believes that cryptocurrencies are a great idea.
“I’m for the least amount of regulation. I don’t know what’s gonna happen to cryptocurrencies. I think it’s a great idea. And I only have one rule: no fraud […] I think that the government has a role. And somebody has a case that there is fraud, I think it should be investigated […] What I want to do is legalize the freedom of choice, absent blatant fraud,” he said in the interview with CNBC.
Bitcoin's technical picture
On the intraday charts, the Relative Strength Index (RSI) has left an oversold territory, though it still points downwards.
The first resistance is created by $9,700 (the middle line of 1-hour Bollinger Band). Once it is cleared, the upside is likely to gain traction with the next focus on $10,000. A sustainable move above this psychological barrier is needed to mitigate the immediate bearish pressure and create a precondition for an extended upside towards $10,300. SMA50 (Simple Moving Average) located on approach to that level might slow down the recovery;
On the downside, a sustainable move below $9,450 (the lowest level of the previous hour) will trigger more selling orders and push the price towards the recent bottom of $9,234. The next critical support awaits us on approach to $9,000, let's hope, that's where the carnage will stop.
BTC/USD, 1-hour chart
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