First Mover Asia: Bitcoin falls in pre-holiday trading; Ether drops

A recovery in the tether-yuan pairing suggests the Chinese market is slowly recovering from the country’s crypto trading ban in September.

Good morning. Here’s what’s happening this morning:

Market moves: Bitcoin remains around $57,000 a day before the U.S. Thanksgiving holiday while tether’s discount to the Chinese yuan mostly recovers from the extended shock of China’s September crypto trading ban.

Technician’s take: Initial signs of downside exhaustion could stabilize the intermediate-term uptrend from July. Volatility expected to rise.

Prices

Bitcoin (BTC): $57,002 -1.1%

Ether (ETH): $4,250 -2.3%

Market moves

Bitcoin spent most of Wednesday trading below $57,000 with low trading volume, as the U.S. enters the Thanksgiving holiday. Ether dropped below $4,300, a more than 2% decline.

(CoinDesk/CryptoCompare)

Meanwhile, a recovery in the price for the USDT/CNY (tether/Chinese yuan) pair indicated the market in China is slowly recovering from the country’s September severe ban on crypto trading, according to the Hong Kong-based crypto financial service provider Babel Finance.

Babel Finance wrote in its weekly newsletter dated Nov. 22 that tether’s quoted prices in the yuan on the over-the-counter (OTC) market have recovered in the past week.

Under normal market conditions, the price of tether expressed in yuan should match that of the U.S. dollar’s exchange rate with the Asian currency, but tether has traded at a significant discount since China’s ban.

A recovery from this discount indicates that China’s crypto market has returned to normal from the ban, which could be good news for the markets due to China’s historical significance in crypto.

Technician’s take

Bitcoin daily price chart (Damanick Dantes/CoinDesk, TradingView)

Bitcoin (BTC) is holding support above its 100-day moving average, which is currently at $53,700. The cryptocurrency was trading around $57,000 at press time and could see further upside toward the $60,000 resistance level over the short term.

The relative strength index (RSI) on the daily chart is almost oversold, similar to what occurred in late-July and September, which preceded near-50% price rallies. Still, buyers will need to break above the $60,000-$65,000 resistance zone in order to yield upside price targets.

Price momentum is slowing on the daily chart, although initial signs of downside exhaustion could stabilize the intermediate-term uptrend from July. Volatility will likely return into the U.S. Thanksgiving holiday, which could lead to sharp price movements over the weekend.

Important events

1 p.m. HKT/SGT (5 a.m. UTC): Japan leading economic index (Sept.)