Bitcoin (BTC) fell further pre-Wall Street on Feb. 3 as analysis revealed old resistance levels had returned to haunt bulls.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
$38,600 is back
Data from Cointelegraph Markets Pro and TradingView painted another uninspiring picture for BTC/USD Thursday, with the pair meeting new lows of $36,275 on Bitstamp.
After shocking tech stock moves during Wednesday’s trading session, the knock-on effect for crypto remained palpable as major tokens struggled to stabilize.
Zooming out, popular trader and analyst Rekt Capital revealed the area at $38,600 — a stumbling block at several points in 2021 — was once again acting as a line in the sand for bulls to cross.
“Indeed, BTC produced an upside wick into resistance on its latest recovery,” he tweeted.
“For the time being, this ~$38600 area continues to figure as resistance.” BTC/USD annotated chart. Source: Rekt Capital/Twitter
For others, including fellow trader Anbessa, it was a case of “the lower, the better” for Bitcoin, this chiming with existing expectations of a more significant breakdown occurring before a full recovery.
– dead cat inside LTF rising wedge, breakout & continuation
– current support levels mid range, M-neckline & downtrending channel (since Nov21)
The lower we go the better r:r ratio for a new #midterm LONG entry. Eg nuke scenario (right) crowded greedy entry pic.twitter.com/nCJVcHiQjc
— AN₿ESSA (@Anbessa100) February 3, 2022
Tech stock trouble, meanwhile, erased positive sentiment from other macro cues, with Russia’s proposal to allow banks to sell Bitcoin and India’s new crypto tax proposal taking a back seat.
Puell Multiple returns to classic oversold territory
Turning to on-chain metrics, it was the turn of the Puell Multiple this week to follow Bitcoin’s relative strength index (RSI) in printing a major “oversold” signal.
Related: Bitcoin whales buy at $38K as BTC supply per whale hits 10-year high
Created by David Puell, the popular indicator uses miner revenues relative to spot price to determine when the latter is overly high or low.