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BTCUSD - Looking for Support at $3700 as Rumblings Grow



BTCUSD - Looking for Support at 3700 as Rumblings Grow
In the last couple of weeks Bitcoin (BTCUSD) has been able to consolidate a little as it receives some much needed support from around the $3700 level. In the last few days it has again declined to this level and been propped a little after rallying off $3700 a week or so ago. In the few weeks leading up to the consolidation, BTCUSD dropped sharply to its lowest levels for 2018 after having been quite content to trade right below the current key level of $6500 for many weeks. Up against immense selling pressure it dropped sharply to around $5500 before consolidating for several days before dropping even further to below $4300 before the most recent drop.


It now looks like some considerable effort will be required to get the Bitcoin price back to within reach of the significant level of $6500. It had made several attempts to break higher through the resistance at $6500 however it was sold off on every occasion. In early September Bitcoin fell very sharply from a one month high near $7500 and quickly settled under $6500. The $6500 level has firmly established itself as a level of significance however this is obviously now a considerable distance away and new significant levels will need to be identified.

In the second half of July, BTCUSD enjoyed a strong surge higher moving through the key $6500 level and to the two month high. May and June saw Bitcoin fall strongly losing almost 40% of its value in that short period, from the peak near $10000 in early May to trading levels just below $6500. Throughout April, BTCUSD again rallied well off support at $6500 to approaching $10000, however these gains have been few and far between in 2018.

Bloomberg Intelligence analyst Mike McGlone suggests that Bitcoin could fall an additional 60% from its current levels. “There's little to prevent fading Bitcoin prices from reaching the continuous mean of $US1,500”, he wrote in a note, suggesting a number of factors leading to falls including the Bitcoin Cash split, and possibly selling related to year-end tax purposes.  The United States Securities and Exchange Commission (SEC) has also tightened the noose around cryptocurrencies, fining two companies last month that hadn't registered their initial coin offerings as securities. The head of the SEC said last week it is unlikely that the agency will approve a Bitcoin exchange-traded fund anytime soon due to concern over a lack of investor protection.  Despite the doom and gloom for Bitcoin, one institution continues to buy.It has been reported that Grayscale Investments, a self-proclaimed “trusted authority on digital currency investing,” has accumulated thousands of bitcoin for its in-house investment trust.Grayscale has seen its bitcoin investment balloon by 30,600 BTC to 203,000 total this year, which is more than one percent of the bitcoin’s total circulating supply.

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This post was written by Graeme Watkins

CEO Valutrades Limited, Graeme Watkins is an FX and CFD market veteran with more than 10 years experience. Key roles include management, senior systems and controls, sales, project management and operations. Graeme has help significant roles for both brokerages and technology platforms.