After the September 7 crash, bitcoin worked out the upper line of the expanding side channel twice, which was formed a couple of months ago on a 24-hour timeframe. The price left this channel about a month ago, however, its borders are still of great technical importance. In particular, they now act as support for the movement of bitcoin. The level of $43,852 also acts as a support, from which the price has also rebounded twice. Consequently, further downward movement is now questionable, however, the upward trend cannot be restored yet. A correction seems to be the most probable, but note that before the quotes fix below the level of $43,852, bitcoin should not be sold. That is, we trade clearly on signals.
India has decided to limit the introduction of taxation on operations with cryptocurrencies instead of completely banning them. Recall that back in the spring of this year, there were persistent rumors that the Indian authorities intend to completely ban bitcoin and other cryptocurrencies. Now, the country has decided to lift the ban on bitcoin and will recognize it as an asset class to be taxed. This is good news for bitcoin because, after the greatly tightening of the circulation of cryptocurrencies in China, many participants in the cryptocurrency market feared that other countries would follow its example. But, so far, the only large country that has issued a complete ban was China.
Meanwhile, South Korea's central bank has demanded the closure of 40 of 60 cryptocurrency exchanges that do not meet the requirements of the Financial Services Commission. The Commission demanded that all exchanges undergo mandatory registration by September 24 and notify their clients of a possible closure. However, the largest 5 exchanges in South Korea account for up to 90% of all trading operations, so even if 55 exchanges out of 60 close, it will not cause serious damage to the crypto industry. But the regulator still fears the loss of many investors who work with unscrupulous cryptocurrency exchanges, for which client protection is not a priority.
Thus, the fundamental background for bitcoin remains unchanged. Considering the fact that the cryptocurrency has still grown by as much as $20,000 in recent months, a correction would be a very logical continuation. On the 24-hour timeframe, bitcoin quotes are located only below the critical line, but above the Ichimoku cloud. To continue the correction, the price must consolidate below the upper channel line and the level of $43,852.
The markets also continue to expect information from the US government on the introduction of taxation on cryptocurrency transactions, as well as the mandatory collection of personal data of all clients of crypto exchanges as part of a new stimulus package called "infrastructure." We linked the last round of bitcoin growth precisely with the fact that investors could be in a hurry to buy bitcoin before innovations, which will make digital gold transactions less attractive. Moreover, the Fed continues to inject hundreds of billions of dollars into the economy, some of which flows into the cryptocurrency market. Therefore, if the price consolidates above the critical line, the upward trend may resume.
On the 24-hour timeframe, bitcoin began a correction, but now the cryptocurrency needs to overcome the $43,852 level and the upper channel line for the downward movement to continue. Only in this case, we advise selling with a target of $40,000. If the price consolidates above the Kijun-sen line, then you may consider buying bitcoin with a target of $50,772.
The material has been provided by InstaForex Company - www.instaforex.com