Crypto Outlook: BTC drops below 100k per coin

Since our last crypto report, the bullish momentum driving Bitcoin’s price appears to have taken a hit, with the bears now seemingly in control of the coin’s price. 

In this crypto report, we aim to shed light on the possible factors aiding the recent developments in BTC’s drop by focusing on the recent legal developments surrounding the US government’s BTC holdings and next week’s inauguration of President Trump which coincides with the stepping down of SEC Chair Gensler and end our report with a technical analysis of Bitcoin’s daily chart given its status as a barometer for the overall crypto markets.

Crypto: Overview Report

US Government receives permission to sell $6.5 billion worth of BTC

According to court documents, the United States District Court of the Northern District of California has ruled against a motion by Battle Born Investments, who sought to prevent the government from selling roughly 69,370 Bitcoin which were seized back in 2020 from an unidentified hacker whose identity remains unknown and is referred to as “Individual X”.

The ruling by the Federal Judge appears to have paved the way for the government to sell the aforementioned Bitcoin’s which were seized.

Hence, the possibility of a mass government auction of the aforementioned Bitcoins may have sparked concerns in the market in regards to a potential sell-off and in turn may have pre-emptively weighed on the coin’s price.

However, despite the apparent approval for the government to move forward with the sale, the government does not appear to have sold its Bitcoin holdings at the time of this report according to on-chain data.

Hence, for an impact to be seen, the government may have to actually proceed with a Bitcoin auction, which could weigh on the coin’s price. On the flip side, should the government continue to hold the aforementioned bitcoins it may not influence the coin’s price.

SEC Chair Gensler steps down in one week as President-Elect Trump takes office.

SEC Chair Gensler is set to step down on the 20th of January, which coincides with President-elect Trump’s inauguration date. The SEC Chair has long been seen by the crypto community, as a Chair who aimed to legislate by enforcement and through his actions may have stifled progress in crypto legislation.

In particular, we would like to mention the SEC’s case against Ripple Labs which ended in a partial victory for Ripple Labs, following a lengthy legal battle.

Hence, the 20th of January holds significance for pro-crypto advocates, as the president-elect has been a vocal supporter of Bitcoin during his campaign and thus attention may turn as to whether the President will follow through on his support for a strategic Bitcoin reserve.

In turn, such a scenario could aid Bitcoin’s price. However, should the President fail to voice his support for pro-crypto legislation after he takes office, it could have bearish implications on Bitcoin’s price.

Crypto Technical Analysis

BTC/USD Daily Chart

• Support: 89000 (S1), 79800 (S2), 72200 (S3) 
• Resistance: 94500 (R1), 101400 (R2), 108300 (R3)  

BTC/USD appears to be moving in an overall downwards fashion, with the coin’s price currently taking aim for our 89000 (S1) support level.

We opt for a bearish outlook for the coin’s price and supporting our case is the RSI indicator below our chart which currently registers a figure of 40, implying a bearish market sentiment.

For our bearish outlook to continue, we would require a clear break below our 89,000 (S1) support level, with the next possible target for the bears being the 79800 (S20 support level.

On the flip side, for a sideways bias we would require the coin’s price to remain confined between the  89,000 (S1) support line and the 94500 (R1) resistance level.

Lastly, for a bullish outlook, we would require a clear break above our 94500 (R1) resistance level with the next possible target for the bulls being the 101400 (R2) resistance line.

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Avertissement sur les risques :

Crypto CFDs are an extremely high-risk, speculative investment and you may lose all your invested capital. Before trading, you need to ensure you fully understand the risks involved taking into consideration your level of experience and investment objectives. Seek independent advice, if necessary.