Toward the end of last week, Bitcoin price rallied back to the $8,500 level, and although it slid below $8,000 over the weekend, the coin managed to return to $8,500 on Monday morning.
The upward movement was likely a result of Bank of England governor Mark Carney’s letter released to G20 members ahead of their meeting in Argentina tomorrow, which stated that “crypto assets do not pose risks to global financial stability at this time.” The Financial Stability Board, which coordinates financial regulations for the G20 economies and is chaired by Carney, has already resisted calls for stricter rules on cryptocurrencies.
Carney also cited that the combined value of crypto assets is less than 1% of global GDP, while the notional value of credit default swaps just before the global financial crisis was 100% of global GDP, so G20 members’ concerns over crypto assets are unwarranted for now.
Further Selloff Risk
Even though there was good news regarding Bitcoin today, investors should still be cautious and expect further selloffs in cryptocurrencies. Moreover, future movements also depend on the outcome of the G20 meeting.
Based on today’s chart, a triangle pattern is now forming, indicating that BTC could be trading at between $8,400 and $8,600 for the rest of the day, so a bounce up to $9,000 is unlikely. The coin is holding a support at $8,200, while a resistance of $8,800 has yet to be tested.
As for the technical indicators, there’s a weak bearish sign as shown by the MACD. The moving averages also show that BTC could drop down below $8,500 later today, but these are not good indicators for long-term movements.
Looking at the Technical Indicators:
- Hourly MACD — BTC is in a bearish zone
- Major Support Level — $8,200
- Major Resistance Level — $8,800
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