- Bitcoin upside recovery is capped at $7,500 resistance.
- Fed's officials go on with their extreme volatility mantra.
Bitcoin price recovered during the previous session, but $7,500 resistance proved to be too strong for the bulls. The coin retraced from $7,512 high to trade at $7,290. The strong recovery witnessed across the cryptocurrency markets on Tuesday across may signal that the market bottomed out at least for the time being, but the bulls have yet to prove their capacity to drive the prices out of the long-term bearish trend.
BTC\USD needs to climb above 61.8% resistance level at $8,100 and conquer 200-DMA, which is registered at $9,500 before we can say that Bitcoin is out of woods. Until that happens all recovery attempts are bound to be short-lived and used as a selling opportunity.
Federal Reserve Governor Lael Brainard mentioned cryptocurrencies in prepared remarks at New York University’s Stern School of Business on Tuesday. She said that their stretched valuations and extreme volatility raise issues about investor and consumer protection, while it is not yet obvious that they pose a serious threat to financial stability.
“One area that the Federal Reserve is monitoring is the extreme volatility evidenced by some cryptocurrencies. For instance, Bitcoin rose over 1,000 percent in 2017 and has fallen sharply in recent months,” she said.
Bitcoin price technical picture
BTC is trading at $7,300 with the downside bias, below key moving averages on intraday charts. The nearest critical resistance is seen at $7,500, once it is cleared, the recovery may be extended towards $7,800 and $8,000 with an ultimate bullish aim at $8,100 (61.8%-DMA). On the downside, the support is produced by $7,000, while the move below $6,900 will increase selling pressure and push the price towards $6,450.
BTC/USD, the hourly chart
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