Bitcoin hit a snag slightly above $13,000 yesterday. The momentum that was believed to be strong enough to push Bitcoin above June highs, turned out to be nothing but a bear trap. It appears that the bears were waiting for a catalyst to acutely revenge following the gains from the lows traded in the first week of July around $9,657.
- Fed’s chair Jerome Powell’s comments on Libra had a far-reaching impact on Bitcoin price.
- Bitcoin has revamped the bullish trend and is pushing for a reversal above $11,000 support.
Experts and analyst link the devastating drop to comments from the highest regulator in the United States, the Federal Reserve Bank. The chairman of the central bank Jerome Powell said that Libra cannot go on unless certain issues are addressed. Moreover, Facebook’s “Libra raises many serious concerns regarding privacy, money laundering, consumer protection, and financial stability.” Powell was speaking at is semi-annual testimony on monetary policy before the U.S. House of Representatives Financial Services Committee on July 10.
While the comments are not directly linked to Bitcoin, they had a far-reaching impact on Bitcoin as the price tanked 7% during the presentation. Declines progressed after the presentation to the extent Bitcoin stopped just above $11,000. Looking back, the announcement of Libra last month gave Bitcoin a boost to new 2019 high. Therefore, it appears that Libra exposes a lot in the regulatory space for digital assets and performance of the cryptocurrency market could in future depend on how regulation is handled when it comes to Libra
BTC/USD 1-h chart
Bitcoin, on the other hand, has revamped the bullish trend and is pushing for a reversal. A break above $12,500 hurdle has paved the way for correction to the current $11,696. Technically looking at Bitcoin, chances for growth are immense with $12,000 being in focus.
The price is still trading under the 100 Simple Moving Average. However, other technical indicators send positive signals. For instance, the Relative Strength Index (RSI) is currently above the oversold and moving towards the average. The MACD has slowed down the downward slope and could soon increase the divergence north as an indicator of rising buying pressure.
Bitcoin Key Technical Indicators
Key Support Areas: $11,000, $10,500 and $9,500.
Key Hurdles: $12,000, 100 SMA, $13,000 supply zone.
RSI: Trending upwards.
MACD: Moving horizontally after the drop; suggests diminishing selling pressure.