Disclaimer: The information presented does not constitute financial, investment, trading or other advice and solely reflects the opinion of the author.
- Binance’s legal troubles caused BTC to fall to the $25,000 mark.
- The downturn has reduced the supply-to-earnings ratio from 69% to 62.5%.
The US continued to increase regulatory pressure on cryptocurrencies, with Binance Exchange once again in focus. Following an earlier CFTC filing in March, the US Securities and Exchange Commission also filed a filing 13 new charges on June 5 against Binance – the world’s largest crypto exchange.
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Bitcoin [BTC] reacted negatively on the move, falling below $26,000 and hitting a new low in the second quarter.
There was more to the recent price swings below $27,000 BTC transactions at a loss as the uncertainty unsettles the owners. At press time, cryptocurrency was “fear and greed” index was “fear” and meant investors were worried about the market.
BTC pulls back towards the 50% Fibonacci level
Source: BTC/USDT on TradingView
A Fibonacci retracement tool (yellow) was placed between the recent swing high ($31,000) and the swing low ($19.5,000). Since hitting a new high of $31,000 in mid-April, BTC’s price action has been trading below a trendline resistance line (white), highlighting the increasing downtrend momentum in the second quarter.
The 61.8% ($26.6k) Fibonacci level golden area has been a key support since late March. It was retested several times but finally cracked on Monday after the Binance lawsuit.
However, sellers could further dampen the prevailing bullish sentiment if they clear the hurdle at the 50% Fib level ($25.27k). Below that, likely support levels are $23.9K and $22K.
But the bulls could regain their leverage if BTC reclaims the golden 61.8% ($26.6k) Fibonacci level. Still, the bulls can only advance and reach $28.5k if they clear the trendline resistance hurdle. The next key resistance level after $28.5k is $29.8k.
Meanwhile, OBV has been eerily flat since late March, suggesting flat and limited trading volumes. Similarly, the RSI is trending in the lower territory, indicating increased selling pressures.
BTC’s profit supply has shrunk by 5%
Source: Glassnode
How many are 1.10.100 BTC worth today?
According to Glassnode, BTC’s sharp drop from $27,000 to $25,000 caused supply’s share of profit to drop from 69% to about 62.5%. It is worth noting that the huge profit offer made BTC impossible to go beyond $28,000 as this level was a clear profit target.
It remains to be seen whether BTC will stage a corrective bounce, with the focus now on the Binance lawsuit and next week’s FOMC meeting.
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