Bitcoin drops more than $200, turns negative on week

Eren Sengezer FXStreet

Following a $500 gain on Monday, bitcoin is on track to close the third day in a row with losses. On Thursday, the BTC/USD plummeted to a new weekly low at $3600 and was last seen trading at $3620, down 6.65%, or $260, on the day.

Despite a strong rebound earlier in the week, investors remain hesitant to return to bitcoin as China's ban on local digital currency exchanges and trading platforms cloud the future of the asset. According to the latest available data on CryptoCompare, South Korea and Japan surpassed China in terms of trading volume on Thursday.

Omkar Godbole, FXStreet Editor, wrote an article for CoinDesk, noting "...assumptions that China's crypto trading crackdown will not have a long-term impact seem to have waned. This is evident from the price action analysis, which points to bullish exhaustion around $4,000 and a lack of substance in the rally from $2,980."

On the other hand, the fact that the greenback gathered strength on the hawkish FOMC statement seemed to have increased the pressure on the pair. As of writing, the US Dollar Index was consolidating above the 92 handle.

Technical levels to consider:

The first support for the pair could be seen at $3475 (Sep. 17 low) followed by $3270 (100-DMA) and $3000 (psychological level). On the upside, resistances align at $4000 (psychological level), $4115 (Sep. 18 high) and $4380 (Sep. 12 high).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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