Bitcoin Outlook Update: BTC/USD Selloff Continues – Key Levels to Watch
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Bitcoin, BTC/USD, FOMC Rate Decision, Technical Analysis – Talking Points
- Bitcoin (BTC/USD) retests critical support ahead of the FOMC rate decision
- Demand for the major cryptocurrency remains vulnerable to developments in the Evergrande saga as risk aversion favors safe-haven assets, at least for now
- The analysis contained in article relies on price action and chart formations. To learn more about price action or chart patterns, check out our DailyFX Education section.
Bitcoin (BTC/USD) prices continue to test critical support after this week’s selloff drove prices back to the key psychological level of $40,000. The cryptocurrency remains a key source of deep speculation for investors, leaving it prone to a pickup in general risk aversion.
With markets now pricing in the collapse of China’s second-largest property developer, Evergrande, a loaded economic calendar may serve as an additional catalyst for crypto prices for the remainder of the week.
Although both the Federal Reserve and the European Central Bank (ECB) have maintained a dovish stance throughout the pandemic, rising debt levels and higher inflationary concerns have placed the former at the forefront of the economic calendar as this week’s likely main event risk.
DailyFX Economic Calendar
Bitcoin (BTC/USD) Price Action
After falling below the 78.6% fibonacci retracement level of the June – September move at $47,838, Bitcoin prices have fallen back towards critical support at $40,000. With prices currently trading below both the 50 & 200-period moving averages (MA), the commodity channel index (CCI) remains in negative territory, a possible indication that further downside may prevail , at least for now.
With price action currently trading between prominent levels, the ability to break below the key psychological level of $40,000 may give rise to further bearish momentum and a potential retest of $38,000.
Bitcoin (BTC/USD) Daily Chart
--- Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and follow Tammy on Twitter: @Tams707
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.