Bitcoin Price Analysis – BTC Hits 100-day MA Support, But Will It Hold Against Bearish Fundamental Drivers?

Key highlights:

  • BTC is down another 3% today as it crashed beneath $44,000 to reach as low as $39,600 yesterday
  • Luckily, the buyers managed to find support at the 100-day MA by the end of the day
  • The Evergrande situation combined with the new crypto bill is adding a new bearish presence to the market
Bitcoin price$42,250
Key BTC resistance levels$43,950, $44,800, $46,000, $47,000, $47,820
Key BTC support levels$41,165, $41,000, $40,000, $38,375, $38,000

*Price at the time of publication

Bitcoin continues to slide and is now down by a whopping 12% over the past week of trading alone. The coin fell from above $48,000 on Sunday to break beneath support at $44,000 and hit $43,000 on Monday. The price decline continued yesterday when BTC collapsed beneath $40,000 to reach as low as $39,600. Luckily, the buyers regrouped by the end of the day to close the daily candle at the 100-day MA.

Today, the bulls are attempting to rebound from the 100-day MA as BTC trades at $42,000.

There are two major driving forces behind the recent price collapse, which include the Evergrande situation in China and the new shocking US Crypto bill. Both of these factors are enough to spook the market on their own but, when combined, could present a potentially catastrophic outcome.

The Evergrande situation has the capability to cause a global recession. One of the world’s largest property developers is struggling to pay its interest payments which have led many experts to believe that bankruptcy is highly probable. Although this situation has been heating up for a number of weeks now, it is starting to get very serious with the company being unable to pay its $100 million interest payments this week. 

Evergrande is estimated to be in between $200 billion to $500 billion worth of debt, causing the entire situation to be dubbed as the “China Lehman Brothers scenario” who famously had over $700 billion worth of debt they could not pay off, which led to the 2007 global market recession. 
On top of this, the uncertainty is starting to spread to other companies within the sector as the contagion fear grips the overall market:

Sinic Holdings Group (2103HK)

Contagion: Another Chinese real estate development company down over 90% this morning. #Evergrande— T O’Mahony (@TurboCBDC) September 20, 2021

It is still unclear if any “bailout” would be provided by any government. The Chinese authorities are reluctant to provide aid as this would weaken their economy over the long term. On the other hand, the US might be another option as they might find themselves in a situation where they have to bail out Evergrande to prevent any further knock-on effects in their own economy. 

BTC now holds a total market cap value of around $817 billion.

Let us take a quick look at the markets and see where we might be heading.

Bitcoin price analysis

What has been going on?

Looking at the daily chart above, we can instantly see the sheer drop for BTC during September. From high to low, BTC has already dropped by a steep 25% in the month after starting from as high as $53,000.

The coin had found support at $44,800 last week and started to rebound by the end of the week. Over the weekend, BTC attempted to push higher again but could not pass much further above $48,000. It rolled over from there on Sunday and started to collapse on Monday when it finally fell through the support at $44,800 and continued further beneath $44,000 (.382 Fib Retracement level).

Yesterday, BTC breifly spiked beneath $40,000. Luckily, the buyers regrouped by the end of the day to close the daily candle above the 100-day MA level at $40,740. Today, the bulls are attempting to rebound from this support as they look to tackle $42,000.

Bitcoin price short-term prediction: Neutral

The recent price drop beneath $46,000 (100-day MA) has turned the market neutral again. The coin would now need to break $50,000 to turn bullish in the short term. On the other side, BTC would still need to drop beneath $40,000 (200-day MA) to be in danger of turning bearish again.

If the sellers do push lower again, the first support lies at $41,165 (.5 Fib Retracement). This is followed by $40,740 (100-day MA), $40,000 (Downside 1.272 Fib Extension), and $38,375 (.618 Fib Retracement).

Beneath $38,000, additional support lies at $36,660, $36,000, $35,000, and $34,440 (.786 Fib Retracement).

Where is the resistance toward the upside?

On the other side, the first strong resistance is now located at $44,000. This is followed by $44,800, $46,000 day MA), $47,000 (50-day MA). and $48,000.

If the buyers continue to drive higher from $48,000, additional resistance lies at $49,325 (1.272 Fib Extension), $50,0000, and $53,000 (bearish .786 Fib Retracement & September resistance).


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