Bitcoin price prediction: bears are behind the driving wheel

BTC/USD broke the range to the downside, more sell-off in sight.
A critical support resistance is seen at $3,126.

Bitcoin has been trading marginally above $3,500 handle for the best part of Monday so far. The first digital coin resumed the downside and retested 2019 low on Sunday, though the profit-taking around the crucial technical level triggered the recovery.

The fundamental backgrounders are mixed at this stage. Thus Wyoming is considering a bill that will legalize cryptocurrencies as a means of payment and allow banks to offer custody services for the industry. This is a positive development that will inject a bit of clarity into the regulatory landscape.

Meanwhile, the Netherlands is moving in the opposite direction. The country’s authorities are about to ban anonymous cryptocurrency trading to combat money-laundering and illegal financial activities that often involve digital money.

Anyway, the market has chosen to ignore good news and focus on unhappy developments.

BTC/USD the daily confluence detector

At this stage, the downside is the path of least resistance for Bitcoin. The move the North is riddled with numerous technical resistance levels.

The first hurdle is created on approach to $3,560 by 38.2% Fibo retracement level monthly. Once it is cleared, an even stronger barrier will come into focus. 38.2% Fibo retracement level weekly, SMA5 4-hour, and Bollinger Band are located on the approach to $3,590-$3,600 area.

Though if BTC bulls manage to take the price higher, they will bump into the next resistance created by a confluence of 1-hour SMA levels, including SMA200 at $3,608 and SMA100 at $3,616.

Previous daily high and previous weekly high on approach to $3,800 is likely to stop the short-term recovery, provided that it does not die out at the previous resistance.

The last bulls’ goal is $4,000, though it looks unattainable at this stage.

The way to the downside is much more comfortable. If the price passes the recent low of $3,480, there will be nothing to stop it until $3,126 - this is the lowest level of 2018.

BTC/USD, 1D

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