Bitcoin Stabilizes After Recent Volatility

Bitcoin Video 21.05.21.

Bitcoin Stays Close To $40,000

Bitcoin managed to stay near the $40,000 level after huge swings in recent trading sessions.

Yesterday, Bitcoin rebounded towards the $40,000 level as speculative traders rushed to buy the dip after the major sell-off. The strength of the rebound was immediately tested by additional negative news.

U.S. Treasury stated that cryptocurrencies could be used for tax evasion and added that crypto transfers over $10,000 should be reported to IRS. Regulators from around the world have started to pay more attention to the crypto market this year, and this attention has already put notable pressure on cryptocurrencies.

Other leading cryptocurrencies like Ethereum and Dogecoin are under some pressure in today’s trading but the situation may change quickly as the crypto market remains very sensitive to any crypto-related news after the recent volatility.

Technical Analysis

Bitcoin has recently made another attempt to settle above the resistance at $42,000 but failed to develop sufficient upside momentum and pulled back closer to the $40,000 level.

This level will likely serve as a psychologically important support level for Bitcoin. If Bitcoin begins to fall below the $40,000 level, another selling wave may follow. RSI has recently returned to the moderate territory, and there is plenty of room to gain downside momentum in case the right catalysts emerge.

If Bitcoin settles below $40,000, it will get to the test of the support at $37,000. A move below this level will push Bitcoin towards the support at yesterday’s lows at $35,000.

A successful test of the support at $35,000 will open the way to the test of the support at $32,000. In case Bitcoin gets below this level, it will head towards the support at $30,000.

On the upside, Bitcoin needs to settle above the resistance at $42,000 to continue its rebound. The next resistance level is located at $44,000. If Bitcoin gets above this level, it will move towards the resistance at $46,000.

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