(C) Reuters. This Week in BTC: Prices Bounce Back
BTC prices are rebounding modestly after hitting six-week lows below $40,000. Meanwhile, El Salvador capitalized on the dip once again, adding another 150 BTC to the nation’s wallet.
The Fundamental Look
Bitcoin traders and investors witnessed a tumultuous week as BTC (BTC-USD) prices dipped from just above $48,000 to under $40,000 briefly, hitting a six-week low. Several factors played a role in influencing this week’s price action in Bitcoin, especially as Chinese real-estate giant Evergrande faces its own so-called “Lehman moment” amid surging default potential.
With one default already in the books and millions needed to be repaid in a matter of weeks, the news rocked global markets right at the start of the week, pushing risk asset prices, including Bitcoin, lower. The FUD (fear, uncertainty and doubt) related to Evergrande triggered a selling spree earlier this week. However, the world’s largest cryptocurrency appears to be stabilizing after finding support.
Meanwhile, El Salvador is capitalizing on current market conditions. Nayib Bukele, the current president of El Salvador, took to Twitter (NYSE:TWTR) to announce that the country has purchased yet another 150 BTC, bringing the total accumulation to 700 BTC. Although prices have bounced back, the market is still highly volatile, with a notional value of almost 70,000 BTC in options contracts set to expire this coming Friday.
Echoing El Salvador’s dip-buying, on-chain analytics provider Glassnode’s newest report suggests that miners are accumulating Bitcoin as the network hash rate continues to recover. Over the past six and a half months, miner wallets have stockpiled almost 14,000 BTC, amounting to more than $600 million.
In crypto culture news, Hungarian sculptors Tamas Gilly and Reka Gergely unveiled a statue of the infamous Satoshi Nakamoto, the mysterious creator of Bitcoin, in Budapest earlier this week. The statue, financed by four Hungarian cryptocurrency-focused organizations, has been erected in Graphisoft Park, an area home to some of the most prominent tech offices like SAP (SAP), Microsoft (NASDAQ:MSFT), Silicon Labs (SLAB), and more.
Finally, Avalanche-based DeFi platform Vee Finance announced via Twitter that it was subject to a cyberattack, with hackers siphoning off 213.93 BTC (roughly $9 million). Pnetwork Protocol, another prominent cross-chain DeFi platform, also announced that it was hacked via Binance Smart Chain, losing around 277 pBTC, representing approximately $12.7 million worth of BTC.
Whales of the Week
September 16: 7,606.626 BTC moved from multiple addresses to an unknown walletSeptember 16: 6,350.924 BTC moved from multiple addresses to an unknown walletSeptember 17: 4,800.822 BTC moved from multiple addresses to an unknown walletSeptember 19: 3,102.525 BTC moved from multiple addresses to an unknown walletSeptember 20: 3,983.752 BTC moved from multiple addresses to an unknown walletSeptember 21: 7,596.543 BTC moved from multiple addresses to an unknown walletSeptember 21: 5,671.405 BTC moved from multiple addresses to an unknown wallet
The Technical Take
Since struggling to remain above $48,000 or to retest the $50,000 psychological level, Bitcoin (BTC-USD) prices have tumbled lower, dragging much of the rest of the cryptocurrency market with it. Despite falling nearly 13% week over week, losses in the seminal pair were outpaced by the 15.59% decline in ADA-USD and the 19.46% slump in ETH-USD.
The BTC-USD pair managed to find near-term support at the 50.0% Fibonacci retracement level, around $40,845, before bouncing back towards the 38.2% level at $43,685. On the downside, it is worth monitoring the 61.8% level, which corresponds with $38,000. Any pullback deeper than 61.8% could indicate a change in the trend after the latest move higher. On the upside, 23.6% or $47,200 could act as resistance for a sustained rebound in the pair.
Interestingly, the Relative Strength Index (RSI) nearly reached oversold territory during the latest selloff, but managed to bounce off a familiar level that marked the turning point for the BTC-USD pair back in July, potentially foreshadowing further upside in the pair over the medium-term.
Meanwhile, on the upside, the moving averages are now acting as resistance even after the Golden Cross pattern unfolded following an upside moving average crossover. Besides initial resistance sitting at $42,900, the 200-day moving average at $45,800 and the 50-day moving average at $46,750 remain the key levels to watch.
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