Despite the two-way action on the price of bitcoin over the last 24 hours, the bears still appear to have the upper hand.
CoinDesk's Bitcoin Price Index (BPI) fell to $13,455 yesterday before rising back above $14,900. At that point, it appeared bitcoin (BTC) had found a bottom, but the ascent was cut short at $14,942 and prices fell further to $12,845 at 04:29 UTC – very likely on fears South Korea may soon announce an outright ban on cryptocurrency trading at exchanges.
With South Korea one of the biggest markets for cryptocurrencies, such a ban by the nation would definitely weaken the demand side pressure. As a result, markets reacted negatively to the news.
However, the initial knee-jerk drop in prices came to a halt seemingly due to later reports clarifying that South Korea may not be able to implement the new legislation anytime soon.
stated: "Legislation for an outright ban of virtual coin trading will require a majority vote of the total 297 members of the National Assembly, a process that could take months or even years."
At time of writing, Bitcoin was trading at $13,7290 – down 4.08 percent from the intraday high of $13,845 (08:59 UTC). As per data source OnChainFX, bitcoin has depreciated by 4.4 percent in the last 24 hours.
The technical charts also favor further downside to prices.
- Yesterday's bullish hammer-like candle meant the sell-off from $17,174 (Jan. 6 high) has ended at $13,550 (yesterday's low). Also, prices closed (as per UTC) yesterday above the rising trendline (inside the rising wedge).
- However, the bulls failed to capitalize on yesterday's positive price action, and the minor rally stalled at $14,970 before falling to an 11-day low of $12,800 today.
- The price action only adds credence to the bearish continuation pattern and a bearish 5-day and 10-day moving average crossover.
- The relative strength index (RSI) has entered bearish territory (below 50.00).
- BTC is more likely to cut through the support at $12,500 (Dec. 30 low) and may extend losses as low as $10,400–$10,000 over the 72 hours.
- Today's high/low ($14,970 and $12,800) engulfs the previous day's price action. So, today's candle looks like a bearish outside day, indicating the continuation of the sell-off.
- Bullish scenario: A close (as per UTC) today above $14,970 could save the day for bitcoin bulls. That said, only a move above $17,174 (Jan. 6 high) would signal a bearish-to-bullish trend change.
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