Bitcoin steadies below $9,500, down more than 10% for the week

IRS reportedly turns attention to crypto investors in US.
$9,000 aligns as the next bearish target for BTC/USD.
A weekly close below $10,000 could bring in more sellers.

Although it looked like Bitcoin was set to enjoy a quiet weekend moving sideways in its tight daily range a little above the $10,000 mark, a sudden selling wave hit major cryptocurrencies during the early European morning on Saturday and caused Bitcoin to erase more than $500 in a matter of minutes. On a positive note, this sharp drop failed to attract more sellers and the BTC/USD pair went into a consolidation phase. At the moment, the pair is down 4% on the day at $9,420. With today's slump, Bitcoin is now losing more than 10% since the start of the week.

Concerns over the potential negative impact of the US Internal Revenue Services (IRS) looking into cryptocurrency investors for potentially failing to disclose income related to investing/trading in digital currencies seem to be weighing on the market sentiment.

Reporting on that issue, the Los Angeles Times said that more than 10,000 people, who could be subject to penalties, were to receive letters by the end of August.

Technical outlook

Looking at the technical picture, the Relative Strength Index (RSI) on the daily chart is sitting near 40, suggesting that there is more room on the downside before the pair becomes technically oversold. $9,000 (psychological level/Jul. 17 low/Fibonacci 78.6% retracement of June rally) aligns as critical support and a weekly close below $10,000 (psychological level/Fibonacci 61.8% retracement of June rally) could attract more sellers and force the pair to test that level.

BTC/USD daily

Share: Cryptos feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.