Bitcoin trades just above $42,000 as market forces balance
Over the past week, BTC/USD price has fluctuated between $40,000 and $45,000, with market forces tending to balance. The current volatility is concentrated in the middle of the price range. That is, the price of Bitcoin is consolidating in a price range above the $42,000 support level. The price action is characterized by small real body candlesticks called Doji and Spinning tops.
Resistance: $50,000, $51,000, $52,000
Support levels: $40,000, $39,000, $38,000
Bitcoin has been trading above the $42,000 price level since September 24. Over the past three days, the price action has been plagued by small real body candlesticks known as Doji and Spinning tops. When these candlesticks appear, it depicts a situation where buyers and sellers take a short break. In other words, sellers and buyers are undecided about the direction of the market. In the current scenario, a breakout or a pullback in price is likely. For example, if the bears break the $40,000 support, Bitcoin will fall sharply to lows of $37,000. Similarly, if the bulls break the $45,000 and $48,800 resistance levels, Bitcoin will resume its upward momentum. Today, small real body candlesticks appeared as Bitcoin consolidated above the $42,000 support level.
Large Investors Shifting from Bitcoin to Ethereum Futures, According to JP Morgan Report
JP Morgan, an American multinational investment bank, revealed that institutional investors are turning to Ethereum derivatives from Bitcoin-based products. Currently, Ethereum futures are trading at a premium as investors turn to Ethereum-based products. As a result, Ethereum products are more attractive to investors as they turn to the world's largest alternative coin. Analysts believe that there has been a "clear divergence" in demand, adding: "This is a setback for Bitcoin and reflects weak demand from institutional investors to use regulated CME futures contracts to gain Bitcoin exposure."
However, as market forces tend to balance, Bitcoin is relatively stable at the $42,000 price level. A breakout would invalidate the Fibonacci tool analysis and Bitcoin would resume its upward movement. A breakout would validate the Fibonacci tool analysis. That is, during the downtrend on September 7, the retraced candle body tested the Fibonacci retracement level of 61.8%. The retracement suggests that the Bitcoin price will fall to the 1.618 Fibonacci Extension or the $37,373.40 level.
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