As BTC -8.28% continues to decline we approach some key technical areas. We may anticipate a sharp increase in demand, first at the 78.6 Fib, and below at the 200SMA. As we approach oversold territory on the RSI for the first time since September, we should consider how quickly BTC's price recovered in the past from similar levels. The last two times BTC -8.28% became oversold on the daily RSI it rebounded back to ATHs within 20 days and 27 days respectively.
Looking at the time frame of recent moves we can put BTC's price action into context. Let us realise that while BTC traded as high as $19,800 6 weeks ago (mid December), BTC traded as low as $5,500 only 10 weeks ago (mid November). Seeing those numbers again is not a stretch, and we are still trading higher than we were exactly a month ago.
Fundamental Concern: There are serious fundamental concerns within the crypto space that have been lingering, one of which it worth noting in this analysis. Almost all crypto exchanges rely on USDT for its fiat pairs. USDT is a cryptocurrency created by the Tether company pegged closely to the US dollar. Exchanges use it to ease the burden of dealing with true fiat. According to the Tether company, every USDT in circulation (2.2B) is backed by a federal reserve dollar but this has been disputed. The US government has issued them a subpoena along with Bitfinex (an exchange closely related to Tether) where they will be asked to prove their reserves.
Good Luck,
Mr Hayek
