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Investing.com – The soared in the early part of the day yesterday, peaking at $20,373 around 2 p.m., but then reversed all of its gains within a few hours in the afternoon, finally settling at $19,180 at time of writing this article.
Note that the correction of Bitcoin yesterday afternoon corresponds, from a timing point of view, to the publication of several better than expected US statistics. Durable Goods Orders fell -0.2% vs -0.4% expected, Consumer Confidence came in well above expectations at 108 vs 104.5 expected, as did New Home Sales at 685k vs 500k expected.
These good surprises on major US economic indicators increase the chances of seeing the Fed continue the aggressive tightening of its monetary policy, since it should draw the conclusion that its action has not penalized the economy as much as one would have could fear him. However, monetary policy tightening is a bearish factor for cryptocurrencies, so yesterday’s data may at least partly explain Bitcoin’s fall.
However, technical analysis also offers a very satisfying explanation for yesterday’s BTC/USD correction.
As seen on the daily chart below, yesterday afternoon’s drop is indeed a rejection from the long-term downtrend line that extends from Bitcoin’s all-time high in November 2021.
Currently located at $20,500, this line, whose importance is reinforced by the proximity of the major psychological threshold of $20,000, was touched yesterday, but not tested, and its crossing remains the first condition for the long-term chart profile to of BTC/USD is improving. Then the next hurdle will be the 100 day moving average at $21,215 and then the major psychological threshold area of $25,000.
On the downside, besides the psychological thresholds of $19,000 and $18,000, the next chart support will be this year’s low around $17,600. Further down, few supports can then be spotted before the $15,000 threshold.