Bitcoin (BTC), which fell more pre-Wall Street on February 3, as analysis revealed that bulls had retreated to old resistance levels.
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
$38,600 is back
Cointelegraph Markets Pro data and TradingView data showed a more uninspiring picture of BTC/USD Thursday. The pair hit new lows on Bitstamp at $36,275.
The knock-on effect of crypto was evident after the shocking moves in tech stocks during Wednesday’s trading session. Major tokens continued to struggle to stabilize following these dramatic events.
Zooming in, Rekt Capital, a popular analyst and trader, revealed that the $38,600 area — which was a stumblingblock at many points in 2021 — was again acting as a line for bulls.
He tweeted, “Indeed BTC produced an upside-wick into resistance upon its latest recovery.”
“For the moment, this $38600 region continues to be resistance.”
Annotated chart of BTC/USD Source: Rekt Capital/Twitter
Others, including Anbessa, a fellow trader, saw it as “the lower, but the better” for Bitcoin. This is consistent with expectations that Bitcoin would experience a greater collapse before it fully recovers.
#BTC Update: Dead cat within LTF Rising Wedge, Breakout & Continue – current support levels mid-range, M-neckline, & downtrending channel (since November21). The better the r.r ratio for a #midterm LONG entry, the lower we go. Eg nuke scenario (right) crowded greedy entry pic.twitter.com/nCJVcHiQjc
— ANBTCESSA, @Anbessa100, February 3, 2022
The tech stock troubles, however, have wiped out positive sentiment from other macro cues. Russia’s proposal for banks to sell Bitcoin, and India’s proposed crypto tax, both took a backseat.
Puell Multiple returns back to the classic territory of oversold
On-chain metrics: This week, the Puell Multiple followed Bitcoin’s relative strength indicator (RSI) and printed a major “oversold” signal.
Related: Bitcoin whales bought at $38K after BTC supply per whale reaches 10-year high
David Puell created the popular indicator. It uses spot price relative to miner revenue to determine when it is too high or low.
The Puell Multiple is currently trending down. It is at its lowest level since June 2021 (the mid-point in a previous retracement following China’s ban on mining).
Puell Multiple chart (screenshot). Source: BuyBitcoinWorldwide