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Trump’s Coronavirus and BitMEX Charges Weigh on Bitcoin (BTC), Analysts and On-Chain Data Reveal Something Surprising

BTC

The month of October started on a low-key note for the first and largest crypto asset by market cap, Bitcoin (BTC). At the close of September, failed attempts at the key $11,000 resistance level left Bitcoin bulls exhausted and somewhat disappointed. As bulls decided to re-energize, bears capitalized on their weakest moment to push prices down. Bitcoin has been struck by bear favoring news in the last couple of days but the flagship asset has shown resiliency, clinching to the $10,400 support level.

First, US Commodity and Futures Trading Commission (CFTC), in conjunction with other Federal prosecutors filed money-laundering charges against the owners of BitMEX, one of the biggest crypto derivatives exchange for facilitating the buying and selling of unregistered derivatives. Bitcoin reacted to this news as it plunged to lows of $10,400 after setting an intraday high of $10,931 on Thursday due to panic-selling before a quick rebound above $10,600. BitMEX was handling more than $1.5 billion of trades with an estimated amount of 193,000 BTC in its vaults.

BTC/USD Daily Chart

Second, when the news about the United States President Donald Trump testing positive for coronavirus filtered out early today, Bitcoin succumbed to further selling pressure to hit lows near $10,363. The news of Trump testing positive comes barely weeks to the US Presidential elections, considered as a factor to influence BTC price in the days ahead.

Bitcoin (BTC) is presently trading at $10,529.

Analysts and On-Chain Data Reveal Something Surprising

Analysts and on-chain data reveal something surprising on the recent storm Bitcoin is facing at the moment which is also corroborated by history: regulation-induced downswings are points of rebound.

In Bitcoin’s short history spanning 11 years, it has seen many negative regulatory actions enacted by governments globally but it has triumphed in all.

Bitcoin researcher Vijay Boyapati believes the BitMex saga won’t be an exception as BTC has always strongly recovered from previous incidences. The BitMEX charges may allude a short-term bearish implication, however, Boyapati believes a recovery is likely in the longer term. He stated that historically, such incidences have always presented a great buying opportunity for Bitcoin.

Other analysts however maintained bullishness on Bitcoin’s long-term outlook but Bitcoin near term outlook remains precarious as traders are advocating cautiousness. However, the sentiment for Bitcoin’s mid-term trading remains neutral. On Bitcoin’s near term outlook, Cantering Clark, a Crypto trader stated:

“In the near term, I think this presents some great two-way trade opportunities. Ultimately, a week from now, it’s water under the bridge. This place has a short-term attention span and is quick to react.”

Bitcoin IOMAP Chart

IntotheBlock IOMAP Model

On-chain data as seen on the IntotheBlock IOMAP model reveals that on the downside, support has thinned massively, but the buyer congestion zones between $10,250 and $10,560 are likely to cushion BTC from extending declines. Previously, about 1 million addresses bought nearly 680,000 BTC in this area. However, the most robust support lies between $9,308 and $9,640.

At the time of writing, Bitcoin price continues to trade within a symmetrical triangle and the $10,500 level is holding as support. For traders who focus on support/resistance levels, $10,200 is an important price to watch.

Image Credit: IntotheBlock, Shutterstock

 

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