The U.S. authorities lately moved over 10,000 bitcoin (BTC) from a government-linked pockets, a transaction value round $600 million to a pockets related to Coinbase Prime.

This transfer follows a earlier switch of $2 billion in late July. Presently, the US authorities holds roughly $12 billion in bitcoin, primarily from legislation enforcement actions just like the Silk Street seizure.

The U.S. Marshals Service lately awarded Coinbase a contract to handle large-cap cryptocurrency property. So this switch may very well be for custodial functions relatively than an intent to promote.

Whereas it’s unclear what’s going to occur to the bitcoins after the switch, ought to the crypto market be nervous that the federal government would possibly promote this bitcoin, which might flood the market with provide, and trigger costs to dump?

It seems like that’s precisely what is perhaps occurring now.

Welcome to TA of the Day (TAOTD)! 👋

Let’s give attention to the present technical setup of BTC/USD based mostly on the 4-hour chart:

BTC./USD 4H Chart by TradingView

📈 Technical Evaluation of BTC/USD 4-Hour Chart

Utilizing technical evaluation ideas lined in our foreign exchange course, let’s analyze BTC/USD.

Shifting Averages (SMA):

1. 10-period SMA: Positioned at 59,139. The value is at present under this stage, indicating short-term bearish momentum. The downward slope suggests continued stress on the worth.
2. 50-period SMA: Positioned at 59,501. The value can also be under this stage, confirming the bearish sentiment within the medium time period. The slope is downward, supporting a continuation of the downtrend.
3. 100-period SMA: Positioned at 60,184. The value is under this stage, reinforcing the bearish outlook. The downward slope signifies that bearish momentum is sustained within the medium-to-long time period.
4. 200-period SMA: Positioned at 62,894. The value is considerably under this stage, indicating a long-term bearish pattern. The downward slope means that the long-term bearish pattern is well-established.

Relative Positioning of Shifting Averages:

• The 10-period SMA is under the 50-period SMA, which is under the 100-period SMA, and all three are under the 200-period SMA.
• This alignment in a bearish order (shorter-term SMAs under longer-term SMAs) strongly helps the continuation of the downtrend throughout a number of timeframes.
• The widening gaps between these shifting averages point out growing bearish momentum.

Market Construction:

• General Construction: The market construction is predominantly bearish within the quick to medium time period, with a sequence of decrease highs and decrease lows since mid-July.
• Change of Character (ChoCh): The newest Change of Character occurred when the worth broke under 60,000 after beforehand forming the next low.

RSI (Relative Energy Index)

• RSI (14): The RSI is at present at 38.16, indicating that the market is nearing oversold situations.
• This means that whereas the general pattern is bearish, a short-term bounce may happen because of the oversold nature of the market.

🕵️ Key Observations

Worth Motion:

Let’s analyze the current worth motion of BTC/USD based mostly on the chart:

1. General Downtrend: The value has been in a normal downtrend since mid-July, characterised by decrease highs and decrease lows.
2. Earlier Excessive: In late July, bitcoin reached a excessive of round 70,000, which marked the beginning of the present downtrend.
3. Important Drop: Following the July excessive, there was a pointy decline to about 53,500 in early August, representing a considerable worth drop.
4. Restoration Try: After hitting the low of 53,500, there was a notable restoration try, with the worth rebounding to round 62,000.
5. Rejection at Resistance: The restoration was met with resistance across the 62,000-63,000 stage, coinciding with the 100 SMA, resulting in a rejection.
6. Consolidation Section: For a few week in mid-August, the worth consolidated in a variety between roughly 58,000 and 61,000.
7. Latest Sharp Decline: The newest worth motion exhibits a pointy decline from the consolidation vary, breaking under 58,000 and dropping to present ranges round 57,115.
8. Elevated Volatility: The current candles present elevated volatility, with longer wicks indicating indecision and speedy worth swings.
9. Quantity Spike: There’s a noticeable spike in buying and selling quantity accompanying the current worth drop, suggesting robust promoting stress.
10.  Assist Check: The present worth is testing current help ranges, trying to stabilize after a pointy decline, with the speedy give attention to the 56,700 space.

Assist and Resistance Ranges:

• Lengthy-Time period Resistance: 70,000 (July peak)
• Main Resistance: 62,755 (aligned with the 200-period SMA) an important resistance stage that the worth wants to beat to reverse the bearish pattern.
• Speedy Resistance: Speedy resistance is famous at 60,000, aligning with the 100-period SMA, the place earlier makes an attempt to interrupt larger have failed.
• Speedy Assist: Speedy help is round 56,700, with additional help at 53,500, aligning with earlier worth motion and a major swing low.
• Main Assist: 53,500 are important ranges to observe, with 53,500 being a crucial stage the place patrons would possibly step in additional aggressively.
• Psychological Assist: 55,000 (spherical quantity).

RSI (Relative Energy Index)

• Trending downwards, confirming the worth downtrend.

Quantity Evaluation:

• Quantity has elevated barely in the course of the current decline, indicating that the transfer decrease is supported by stronger promoting stress.

🤔 Potential Commerce Eventualities

Is BTC/USD a purchase or promote?

The next commerce eventualities are offered solely for instructional functions. Since they don’t embrace full threat administration practices, they don’t seem to be meant to function precise commerce suggestions, however merely meals for thought that can assist you generate your individual commerce concept.

Lengthy Bias:

• Consideration Level: Take into account coming into an extended place if the worth finds help close to 56,700 and exhibits indicators of a bounce, similar to a bullish reversal candlestick sample or constructive divergence on the RSI.
• Invalidation Level: Take into account setting a stop-loss under 55,000 to handle draw back threat.
• Potential Goal: The preliminary goal could be 59,000, with a secondary goal of 60,000.
• Rationale: A bounce from the 56,700 help stage, mixed with the RSI nearing oversold territory, suggests the potential for a short-term rally. Nevertheless, given the broader downtrend, this might be a counter-trend commerce with tighter threat administration.

Brief Bias:

• Consideration Level: Take into account coming into a brief place if the worth fails to interrupt above the 60,000 resistance stage and exhibits indicators of additional bearish momentum, similar to a rejection at resistance or continuation patterns like a bear flag.
• Invalidation Level: Take into account setting a stop-loss above 60,500 to restrict publicity to a possible bullish breakout.
• Potential Goal: The preliminary goal may very well be 53,500, with potential additional draw back if the bearish momentum continues.
• Rationale: A break above key resistance ranges mixed with the general bearish pattern suggests {that a} continuation of the downtrend is extra probably, making a brief place favorable.

📝 TAOTD Abstract

Bitcoin’s current worth motion means that bitcoin is experiencing important promoting stress.

It’s at a crucial juncture, testing current lows and approaching crucial help ranges.

Merchants are probably watching intently to see if the present help holds or if there can be an extra breakdown.

The market construction on the 4-hour chart means that BTC/USD is in a bearish section, with the potential for additional draw back.

The breakdown from the current consolidation, the sharp transfer down with elevated quantity, and the alignment of technical indicators (worth under SMAs, bearish RSI pattern) help this view.

Nevertheless, the method to important help ranges and the potential for oversold situations counsel {that a} bounce or consolidation may happen within the close to time period.

The general construction stays bearish till there’s a transparent break above current decrease highs.

Speedy key ranges to observe are the 56,700 help (a break under may speed up the downtrend) and the 59,000-60,000 resistance zone (a break above may sign a possible pattern reversal).

You need to intently monitor worth motion at these ranges to find out optimum entry factors.

This content material is strictly for informational functions solely and doesn’t represent as funding recommendation. Buying and selling any monetary market entails threat. Please learn our Threat Disclosure to ensure you perceive the dangers concerned.