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Bitcoin Outlook Update: BTC/USD Selloff Continues – Key Levels to Watch

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.
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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.

Visit DailyFX Education to discover the importance of macro-fundamentals in global markets

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.

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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.

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Bitcoin (BTC/USD) Daily Chart

Chart prepared by Tammy Da Costa using TradingView

--- Written by Tammy Da Costa, Analyst for

Contact and follow Tammy on Twitter: @Tams707

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.