Bullish View
Set a buy stop at 58,415 (previous all-time high).
Add a take-profit at 61,500 (close to all-time high).
Set a stop-loss at 55,000.
Bearish View
Set a sell-stop at 53,225 (Today’s low).
Add a take-profit at 53,000 and stop-loss at 55,000.
The BTC/USD dropped sharply as investors reacted to a potential cryptocurrencies ban in India. After rising to an all-time high of $62,000, the Bitcoin price fell to a low of $53,225 in the overnight session. Other digital currencies like Ether and XRP have also dropped sharply.
India Crypto Ban
India has been considering banning cryptocurrencies for months. The parliament has already drafted a bill in line with a government policy that seeks to disrupt the fast-growing sector.
According to Reuters, the bill will outlaw all activities related to digital currencies, including mining, trading, issuance, and transferring of digital currencies. The government will give holders, who are in the millions, up to six months to liquidate their holdings. If the bill passes, India will become the first major currency to ban possession of cryptocurrencies.
Therefore, analysts believe that the Bitcoin price is declining because of the potential oversupply as Indian holders move to liquidate their holdings. Still, the volume of Bitcoin held by Indians is considerably small. According to industry estimates, Indians hold digital currencies worth more than $1.4 billion. This is a small fraction considering that all digital currencies have a market value of more than $1.6 trillion.
Also, there are hopes that the ban will be relatively narrow now that more mainstream companies like Tesla and Square have invested in the currencies. In the United States, Janet Yellen has also called for measures to curtail cryptocurrencies. However, such a bill would be unlikely to pass in Congress.
The BTC/USD is also declining ahead of the important Federal Reserve monetary policy meeting. The bank will start its monetary meeting today and deliver its verdict tomorrow. The bank will leave rates unchanged and provide a program for further monetary policy action.
BTC/USD Technical Outlook
The BTC/USD price dropped sharply from an all-time high of close to 62,000 to 53,205. On the three-hour chart, the price has moved below the black ascending channel. It has also moved below the previous high of 58,415, which was the previous all-time high.
The price has also declined below the 18-period and 25-period moving averages. The two have made a bearish crossover while the Relative Strength Index (RSI) has moved close to the oversold level. Therefore, the pair may bounce back soon as bulls attempt to retest the all-time high.
