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BTC Pullback Takes Bitcoin Away From $42K, Will The Rally Resume?

btc rising wedge

A BTC pullback takes Bitcoin away from the $42,000 price range posting its first negative open after three days of continuous surge. In our latest BTC news, we are reading more about the price analysis of the benchmark cryptocurrency.

The world’s leading cryptocurrency dropped by 7.45 percent in the Asian session on Monday and hit an intraday low of $36,565 before losing even more ahead of the European Trading hours. The sentimental shift owed to speculative traders that wanted to secure short-term gains close to the $40,000 price level. In the meantime, the global investors placed bets on the reflation trades given the increase in government bond yields. The yield on the cryptocurrency surged above 1.09 percent but the inflation expectations favor BTC even more. However, it seems that the market allocated their capital somewhere else as the cryptocurrency turned too risky to purchase it in the overbought levels.

Bitcoin’s Rising Wedge indicator sees price back below $30 in the futures, suggests MMCrypto. Source BTCUSD on TradingView.com

For example, the US benchmark West Texas Intermediate crude oil prices hit $151 a barrel right after Saudi Arabia decided to cut their production in the next two months. The increase also shows that the economic outlook stabilized and investors assessed the rising COVID-19 infection counts against the vaccine distributions. It does show a reduced demand for assets like Bitcoin but investors have to start jumping back in the crypto market as Donald Trump agreed to transfer control to Joe Biden. This marks a clear Democratic win in the election.

btcusd
Bitcoin spots higher buying sentiment in the $36,000-36,500 area. Source BTCUSD on TradingView.com

The Democrats now own both the Congress and the Sector and this paves the way for the Biden administration to pass the more fiscal stimulus, starting with a $2000 check for Americans that battle with the pandemic’s aftermath. Many strategists including the ones of JPMorgan think that bitcoin’s price will reach $100,000 amid aggressive government spending as Immad Akhund, the CEO of Mercury said:

 “I am expecting Bitcoin and tech stocks to double again in the next 6-9 months.  It is clear that we are in an asset bubble fueled by fiscal stimulus, low-interest rates, and ironically higher disposable income in the pandemic.”

More warnings came from other analysts based on eh technical sectors especially as the BTC pullback takes Bitcoin away from its new all-time high. One analyst spotted BTC in a rising wedge Channel which signals a bullish-to-bearish shift after the sharp pullback. It pushes the price even lower at the height between the upper and lower boundary of the channel. He said:

“We had a fake-out, M-pattern, and breakdown. I am getting cautious unless Bitcoin breaks the all-time high again.”

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