Bitcoin fell again on Wednesday, paring its earlier gains, as traders assessed earnings reports and the ongoing delay in finalizing the coronavirus aid.
The BTC/USD exchange rate fell from its weekly top of $11,736 after trading turned choppy. That put the pair on track for a second consecutive day of losses. On the whole, it corrected by up to 3.72 percent in three days of trading.
So it seems, traders remained complacent as they watched the start of the third-quarter earnings season. Meanwhile, the mystery over whether or not Congress and the Trump administration can negotiate further stimulus to aid the US economy kept Bitcoin in a bias-conflict.
The outcome was a middle ground between bears and bulls. Bitcoin plunged from $11,736 but also held strong above $11,300, its newfound support level. The cryptocurrency’s hourly chart showed several attempts to break below the said price floor, but to no avail.
Nico, an independent market analyst, said earlier Wednesday that he sees Bitcoin correcting further lower towards $11,000 in the coming sessions. He recalled a gap near the said level on CME’s Bitcoin Futures chart as the basis for his downside bias.
“A wick into CME Gap at ~11k could happen as a continuation of the current pullback,” Nico tweeted. “Holding/bouncing from there should be a good signal for a retry of local highs.”
Michaël van de Poppe, another notable chartist, added that failing to hold the range above $11,000 may lead BTC/USD further lower towards $10,900 – with an extended downside target near $10,500.
Clues of Rally
Earnings of leading American banking corporations also reflected uncertainty. While on the one hand, JPMorgan and Goldman Sachs posted decent third-quarter profits, on the other, the earnings of Bank of America and Wells Fargo plunged steeply.
Despite an uplifting performance, JPMorgan CEO Jamie Dimon warned that the banking sector growth entirely relies on whether or not there would be a second coronavirus stimulus package.
Mr. Dimon expected loan defaults to increase in the current and the coming fiscal quarters. While noting that JPMorgan had about $34 billion to offset lending risks, he said that the bank would need an additional $20 billion if the ongoing US economic recovery stalls.
Thereby, everything now depends on the US Congress and its ability to pass the relief bill. But hopes of a deal ahead of the US presidential election are fading.
“It’s possible the election becomes the clearing event and people will have more clarity on the nearer term and on fiscal stimulus prospects,” David Lefkowitz, the head of equities Americas at UBS Financial Services, told WSJ.
“Until then, trading is likely to be choppy as it has been in recent sessions,” he added.
Bitcoin would, therefore, would expect to trade inside the range of $10,000 and $11,700. No concrete signals for a breakout yet!