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TA: Bitcoin Extends Decline, Here’s Why BTC Remains At Risk Below $56K

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TA: Bitcoin Extends Decline, Here’s Why BTC Remains At Risk Below K


Bitcoin price extended its decline and tested the $53,000 zone against the US Dollar. BTC is correcting higher, but it is facing a lot of hurdles near $55,000 and $56,000.

  • Bitcoin remained in a short-term bearish zone and it extended its decline to $53,000.
  • The price is now trading well below the $56,000 level and the 100 hourly simple moving average.
  • There is a key bearish trend line forming with resistance near $55,200 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair could correct higher, but it is likely to struggle near $56,000 and $56,500.

Bitcoin Price is Facing Hurdles

Bitcoin failed to recover above the $57,000 barrier and it extended its decline. BTC traded below the $54,000 support zone and it even declined below $53,200.

There was a spike below $53,000 and the price traded as low as $52,943. It is now correcting higher and trading above the $54,000 level. There was a break above the 23.6% Fib retracement level of the recent drop from the $59,040 swing high to $52,943 low.

It is now trading well below the $56,000 level and the 100 hourly simple moving average. There is also a key bearish trend line forming with resistance near $55,200 on the hourly chart of the BTC/USD pair.

Bitcoin Price

Source: BTCUSD on TradingView.com

If there is an upside break above the trend line resistance, it could correct higher towards the $55,500 resistance zone. The 50% Fib retracement level of the recent drop from the $59,040 swing high to $52,943 low is also near the $55,600 level.

The next key resistance is near the $56,000 level. A close above the $56,000 level might increase the chances of a steady increase above the 100 hourly simple moving average.

More Losses in BTC?

If bitcoin fails to clear the $55,500 resistance or $56,000, it could start a fresh decline. An initial support on the downside is near the $54,200 level.

The first key support is near the $53,400 level, below which the price might revisit the $52,943 low. Any more losses could open the doors for a drop towards the $52,000 support zone.

Technical indicators:

Hourly MACD – The MACD is struggling to gain pace in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is recovering towards the 50 level.

Major Support Levels – $54,200, followed by $53,000.

Major Resistance Levels – $55,500, $56,000 and $58,500.



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Bitcoin News

Ether balances on centralized exchanges fall to lowest level since June 2019

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Ether balances on centralized exchanges fall to lowest level since June 2019


According to analysis from on-chain analytics provider Glassnode, the sum of Ethereum on exchanges has fallen to its lowest level for almost two years.

Glassnode estimates that just 13.3 million Ether is currently held on centralized exchanges, the lowest it has been since June 2019. As such, centralized platforms hold roughly $52.4 billion worth of ETH or 11.5% of Ethereum’s entire supply.

The number of Ether on centralized exchanges has fallen 30% in 9 months since peaking at 19 million ETH during September 2020.

A low balance of ETH on exchanges is typically understood to be bullish for the markets as it drives a reduction in supply relative to demand on popular trading platforms. Dwindling exchange balances suggest long-term investors are moving their assets into secure storage or locking their funds up to earn yields through decentralized finance protocols or staking.

In its Monday “Week on Chain” report, the data provider also noted that there has been some reduction in exposure to Bitcoin in favour of Ethereum.

Glassnode correlated the spending behavior of reasonably old Bitcoin unspent transaction outputs of between 6 months and 3 years, finding evidence that long-term investors could have been recently flipping into ETH:

“Whilst this is only an empirical observation (correlation <> causation), the distinct increase in these older BTC being spent back into circulation after a prolonged period of holding makes a compelling case.”

Bitcoin Spent Outputs vs ETH price: Glassnode

The report added that on-chain activity has increased significantly over the past four weeks for Ethereum amid Ether’s recent bullish price action. The total number of smart contract calls, Uniswap transactions, and daily transactions, have all seen notable upticks since the beginning of the year.

Daily transactions hit an all-time high of 1.63 million this week, representing a 22.5% increase over December 2017’s previous peak.

At the time of writing, Ethereum prices were trading at just below $3,900 — cooling from their recent all-time high of $4,220 on May 10.