Bitcoin was consolidating around $7300 mark for the whole last week. Given that the BTC/USD rate remains at its lowest in the last 6 months, it is clear that the bears keep their dominating positions. In this situation, market participants are concerned with only one question: “Is Bitcoin ready to resume the uptrend or should we expect a new bottom?”
We believe that the second scenario is more likely and expect further sell-off with subsequent testing of $5500 support. Exceptionally bad news that keeps coming from different regions of the world undermine market enthusiasm, including the latest decision of Weibo social network to block the account of Binance, one of the world’s busiest crypto exchange. The aggressive propaganda against digital currencies on China’s national television adds oil to the fire. The Chinese mass media keeps planting the idea that cryptocurrencies are a part of financial pyramid scams, aimed at stealing money from the population. Hardly had the traders recovered from the Upbit exchange hacker attack, when thieves stole $50 million worth of cryptocurrency when the market was shocked by new reports of Bittrex hacking. Until recently, Bittrex was one of the few crypto exchange platforms that managed to avoid unauthorized access to client funds. It is worth noting that there has been no official confirmation that the exchange was hacked. However, on December 4, 43 500 Bitcoins were withdrawn from Bittrex exchange to a new wallet. After the incident, on December 5, 2019 Bittrex closed for about one hour for “maintenance”. Given that there is no smoke without fire, many traders found this suspicious. Whatever it was, but the incident clearly did not add optimism to the market.
The next disappointing news was the lawsuit of SEC against the Telegram and TON project. In the coming months, the project founder Pavel Durov will testify to the US judicial authorities. The regulator accuses the project of conducting unregistered ICO worth of $ 1.7 billion, thereby violating US securities laws.
Bitcoin sales are supported not only by a strong fundamental background but also by technical analysis charts. On the 4-hour timeframe, the BTC/USD pair formed a head and shoulders pattern. The development of this figure is quite capable of sending bitcoin to the lower boundary of the long-term downward channel level $6050 in the coming weeks. In addition, the pair keeps below the 200-day moving average, which also indicates a high probability of further downtrend. If bears manage to hold below the $6050 mark, it will open the way to the next important support at $5500. Don’t miss out on this action - use this opportunity to join the sales.
