Bitcoin Finds Support Above $45,000 After Steep Decline

Bitcoin (BTC/USD) Outlook

  • Bitcoin (BTC/USD) looks to be finding resistance below $48,000.
  • El Salvador accepts Bitcoin as a legal tender, BTC/USD bulls back off.
  • The US dollar rebounds as risk-off sentiment comes into play.

It’s been an interesting week for Bitcoin (BITCOMP). US dollar weakness boosted sentiment for the major cryptocurrency. After a dismal NFP (Non-Farm Payroll) report saw Bitcoin peak above the key psychological level of $50,000, bulls were able to push higher before running into a wall of resistance just below $53,000.

Despite the adoption of BTC/USD as a legal tender for El Salvador, the rally came to a rapid halt as the upward momentum faltered, allowing sellers to push prices back below $50,000 and towards the $45,000 mark.

Bitcoin (BTC/USD) Price Action

Since recovering from the July low below $27,000, Bitcoin prices have rebounded back above $40,000 as bulls strive to push towards the April high (all-time high) just under $65,000.

After retesting the May high, BTC/USD plummeted until reaching the 61.8% Fibonacci retracement of the July-September move. On the weekly time-frame, price action currently remains trapped between key Fibonacci levels of the 2020 - 2021 move as well as the above-mentioned move.

Bitcoin (BTC/USD) Weekly Chart

Bitcoin (BTC/USD) Finds Support above $45,000 after Steep Decline

Source: Tradingview, Chart by Tammy Da Costa

Meanwhile, price action currently remains above both the 50- and 200-day moving average on the daily chart whilst the MACD remains above the zero line. This suggests that the upward trajectory may still be relevant, provided prices stay above both the moving averages and the MACD remains above the zero line.

At the time of writing, Bitcoin prices are testing a critical level of support at around $46,000. If bears continue to pressurize the bulls, BTC/USD may test the 61.8% retracement of the July–August move at $43,776 with the 20-period moving average (MA) providing additional support above that level.

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