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Bitcoin hits a tough technical wall: Plunge in sight?

Published 10/10/2023, 07:58
© Reuters
BTC/USD
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Investing.com - After ignoring the outbreak of war between Israel and Hamas last weekend, Bitcoin fell back slightly on Monday, obviously more due to technical factors than to the fundamental context.

For several days now, Bitcoin has been stuck below a major resistance zone made up of the psychological threshold of $28,000, the 100- and 200-day moving averages at $28,030 and $28,050, and several former major peaks and troughs around $28,500.

Bitcoin (BTCUSD) - Graphique journalier

A breach of the $28,000 - $28,500 zone would therefore be a significant bullish technical event, which would favour a rapid return to the key $30,000 zone. However, it seems unlikely at this stage that the cryptocurrency will manage to break through such a barrier without the support of a concrete fundamental catalyst.

However, it is also important to point out that the 100-day moving average has just crossed the 200-day moving average on the downside, which is a negative signal that reinforces that of the 50-day MM crossing below the 200-day MM (death cross) on 12 September.

In other words, from a technical point of view, the most likely short-term scenario for the BTC/USD is a decline.

If these signals do indeed lead to a more pronounced correction in BTC/USD, the $27,000 and $26,000 thresholds will be the first supports to watch, before the $25,000 zone, which has been the site of several major bullish reversals in Bitcoin this year.

Translated from French using DeepL.

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