Bitcoin Plunges More than 5% After Hitting New 3-Month Highs

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The BTC/USD on Tuesday plunged to trade at around $9,215 before gaining later to settle just below $9,450 amid increased selling pressure. The price of the pioneer crypto had rallied late on Monday to trade at a new 3-month high of $10,419 before Tuesday’s massive pullback.

Bitcoin has now fallen back to trade within the 100-hour and the 200-hour SMA lines in the 60-min chart. It has also crept closer to oversold levels of the 14-hour RSI. This triggered the late rebound to push the bitcoin price towards $9,450.

Bitcoin Price Fundamentals Overview

From a fundamental perspective, bitcoin is trading at the back of a very uncertain period in the US market. The coronavirus pandemic has continued to affect global financial markets. Even as the likes of the US continue to re-open their economies, the adverse effects of COVID-19 are likely to last for several months. In addition to this, the US is undergoing a challenging period amid increasing anti-racism protests. They have destabilized the market thereby pushing up the demand for safe-haven assets. Bitcoin is viewed as a potential safe-haven asset amid its scarce and finite nature.

The latest economic data from the US returned mixed results with the ISM Manufacturing PMI narrowly missing the estimate of 43.6 with 43.1. The Manufacturing Employment Index also disappointed with 32.1 versus 35 while Prices Paid beat 36 with 40.8. New Orders Paid missed by a mile with 31.8 versus an expectation of 40.3. On the other hand, the Markit Manufacturing PMI was in line with the expectation of 39.8 while construction spending for April beat -6.5% with 2.9% (MoM).

Bitcoin Price Technical Analysis (the 60-min Chart)

The bitcoin price appears to be trading within a consolidative bullish wedge in the 60-min chart. The price of the most valuable crypto by market cap has also experienced some volatility in the last two trading sessions. This makes it difficult to predict the next move.

The bulls will be looking to extend Tuesday’s late rebound towards $9,805 or higher at $10,085. On the other hand, the bears will target short-term pullback profits at around $9,215 or lower at $8,934.

Bitcoin Price Technical Analysis (the Daily Chart)

In the daily chart, the bitcoin price appears to be trading within a rising trend after bottoming at around $3.780 in February. Bitcoin has now rallied back towards overbought levels of the 14-day RSI in the daily chart.

The bears will be targeting long-term pullback profits at around 61.80% and 50% Fib levels at $7,961 or lower at $7,704. On the other hand, the bulls will look to pounce for profits at around $10,538 or higher at $12,167.

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