A trusted cryptocurrency news source in China - CnLedger, has reported that merchants can now legally accept cryptocurrency as a method of payment. This seems to be huge news for Bitcoin and cryptocurrency space is general. Just imagine the price of BTC if China will move from fiat currency to cryptocurrency? At the same time perhaps question is not “if” china will be moving towards cryptocurrency adoption, but “when”?
Of course it is a long term perspective and this could be the reason why market hasn’t reacted positively yet. Mass adoption along with the the list of use cases for cryptocurrency is at the very early stage.
It seems now the trade physiology could play its’ role. Attention of traders seems to be concentrated on the round numbers, where masses are reacting the most. This could be because the trade volume is extremely low, and retail investors are driving the price, rather than Wales, that currently are just waiting or the right moment.
Based on our previous analysis on BTC/USD: , price has reached and broke below the support level at $6464. It shows the potential for the short term weakness of the BTC price.
At this stage Bitcoin is likely to fall down even further, and round psychological numbers are of interest for the retail investors. Current resistance is at $6500, which today was rejected. BTC is expected to drop towards the next round price. It could be $6400, $6300 or $6200 - the key level that previously has been acting as a strong support.
Although it is not necessary that BTC will fall down, as break and close above the $6513 could be the bullish signal, that might invalidate further drop in price.
In a nutshell;
1. The $6500 resistance rejected. 2. Downtrend trendline rejected. 3. RSI oscillator moving within the descending channel. 4. New Fibonacci cycle just started. 5. Price continues to produce lower lows and lower highs.
This price action clearly indicates the presence of the bearish dominance. As long as price remains below $6500 area, trend will remain down. However, big money might come by surprise, and $6513 resistance could be taken out instantly.
Comment
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BTC rejecting the lower trendline of the extended descending channel. Lets see what next
Trade closed: target reached
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Bitcoin has reached the downside target, watch for the bounce or a break below
Still think overall BTC is bullish. I also believe this accumulation phase will be much quicker compared to last one (see chart). The reason why I think so is because of all those crypto projects (coins, token) that popped out last cycle. I believe they function as as a catalyst this time. With token/BTC trading I increase my BTC quite effective and institutions do same. This should lead to a much quicker reduction of BTC supply.