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Fibonacci Support Trade In View For Bitcoin (BTC)

Posted Friday, July 16, 2021 by
Shain Vernier • 2 min read

It’s another challenging day for cryptos as the leading coins struggle to hold their footing going into the weekend. Over the past 24-hours, Bitcoin BTC (+0.03%), Ethereum ETH (-0.60%), Ripple XRP (-0.46%), and Litecoin LTC (-1.26%) have traded flat. At this point, it appears as though crypto traders are in no hurry to buy July’s dip.

On the news front, there is an interesting story out of Japan regarding regulation. According to Reuters, sources in Tokyo are reporting that the Japanese government is planning to become more aggressive in the cryptosphere. Here are the key bullet points:

  • Japan’s Financial Services Agency (FSA) established a department to manage digital currency regulation. 
  • The Ministry of Finance is considering increasing staff and budget requests are due in August.
  • Anonymous source: “Japan can no longer leave things unattended with global developments over digital currencies moving so rapidly.”
  • The FSA’s new unit was launched on 8 July. Apparently, the bureau is tasked with overseeing decentralized finance. 

Although Reuter’s report is vague, it’s the latest in a global epidemic in cryptocurrency regulation. Ultimately, high-profile ransomware attacks, mining sensitivities, and the expansion of ICOs and altcoins have fueled the recent crypto crackdown. As of now, it looks like 2021 will be remembered as the “year of crypto regulation.”

The fundamentals toward Bitcoin and all cryptocurrencies are quickly changing. Let’s take a look at a few key support levels facing the bearish BTC.

Bitcoin (BTC) Approaches The Macro 62% Fibby. Again.

For the second time in as many months, Bitcoin is approaching the 62% Fibonacci Retracement of 2020/2021’s range ($27,169.19). However, BTC is currently consolidating near the Monthly SMA ($32,138.82). 

bitcoin
BTC/USD, Monthly Chart

Bottom Line: It’s always tough to predict a breakout. But, if Bitcoin takes out the Monthly SMA, we will see a test of $27,169 very quickly. Should BTC break beneath $30,000, I’ll have buy limit orders queued up from $27,755. With an initial stop loss at $24,225, this trade produces $3530 (12.7%) on a standard 1:1 risk vs reward management plan.

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