The cryptocurrency industry shifted from Asia to North America after China ramped up its crackdown on Bitcoin mining. The decision from Chinese authorities led to a massive selloff as Bitcoin price fell from $64,000 to $32,000.
On its move to the downside, Bitcoin has found strong support at the 32,000 level. Despite testing the level multiple times, it has failed to close below. Yet, any bounce was timid, unable to hold above $40,000.
In other words, for close to two months, the proverbial Bitcoin price’s volatility is missing in action. Therefore, traders may choose to trade the range, although the path of least resistance appears to be on the downside.
Because of the Chinese crackdown on mining, the North American miners might have it easier. According to some estimates, before the Chinese authorities’ decision, close to 75% of all Bitcoin mining took place in China. But the energy used in mining the coins was deemed as polluting – a big problem for green investors concerned about the rise of greenhouse emissions.
Yet, investments in the crypto industries rise at an unseen pace. Investors have poured over $8.8 billion in new crypto projects in 2021 alone, by far the most in the past six years.
Nothing to see on the technical picture but a horizontal consolidation spreading for almost two months. Therefore, trading the range might be the best thing to do until the upper or lower edge of the range ends.
Both bulls and bears have a case, but because the market fell from $64,000 to $32,000 prior to the horizontal consolidation area, the bias is that the area will act as a continuation pattern. Therefore, bears may want to sell on a move between $36,000 and $40,000, with a stop-loss order at $43,000-$44,000. Finally, the target may be set by using a risk-reward ratio of 1:2.
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