- Summary:
- Bitcoin price recently rode the momentum from the global IT outage to mount a turnaround, but its stay above $65,00 is threatened.
Bitcoin price declined for the second successive day on Tuesday on the lack of strong market fundamentals to sustain its recent upturn. BTC price was at $66,758 as of this writing, down by 1.3 percent on the daily chart. The recent global IT outage provided fuel for cryptocurrency prices across the board, with crypto enthusiasts pointing it out as a potential turning point for the world to reconsider the strengths of decentralised financial assets and ecosystems. However, in the absence of further developments on that front, Bitcoin is looking for new volatility elsewhere.
Despite the setbacks on Monday and Tuesday, Bitcoin could get an opportunity to claw back against the US dollar later this week when the US releases its Personal Consumption Expenditure (PCE) figures. The PCE Index is a key metric used by the Federal Reserve to gauge inflation, and a second successive monthly decline in the reading could solidify sentiments around a September rate cut. The result in that case would be a loss of traction by the dollar and US treasuries, with investors likely to seek alternative investments in yielding assets like gold and Bitcoin.
Momentum indicators
A look at the RSI shows that the momentum on Bitcoin price is still strong, with the indicator reading at 55 on the 4-hour chart. That said, a stay above the $65,000 psychological support level is critical to maintaining the upside view. Notably, the 7-SMA has been above the 30 SMA for the last two weeks, with three rejections at points A, B and C. Therefore, the upside will likely prevail if the 7-SMA stays above the 30-SMA and vice versa.
Meanwhile, the Moving Average Convergence Divergence (MACD) indicator has recently crossed below the signal line, pointing to the strengthening of the downside momentum.
Support and resistance levels
The momentum on Bitcoin price signals that the downside will likely prevail if the BTCUSD pair is restricted below the $67,254 mark. That could see the first support established at $66,842, beyond which the downside momentum could be strengthened further to take the pair to $66,403.
Alternatively, a move above 67,254 will signal control by the buyers, who will likely encounter the first resistance at 67,611. However, if they manage to overcome that barrier, they will invalidate the downside narrative and could build the momentum to propel the price to test 68,009 in extension.
