Bitcoin prices fell Tuesday after Donald Trump poured cold water on expectations of a new economic package before the November election.
The benchmark cryptocurrency was firm above the $10700-support. Still, it reversed directions shortly after the US president tweeted that he has told fellow Republicans to end negotiations with Democrats over the second coronavirus stimulus package. He accused House Speaker Nanci Pelosi of “not negotiating in good faith.”
BTC/USD dropped $222, or 2.07 percent, to $10,524, while the rest of the cryptocurrency market followed suit by erasing $4.39 billion from its valuation. A majority of them, including Bitcoin, were now holding price above crucial support levels.
OKCoin, a San Francisco-based crypto exchange, said in a Wednesday note that Bitcoin might face short-term setbacks due to an absence of the US stimulus. Nevertheless, it reminded that policymakers would finalize the aid after the presidential election, which would boost Bitcoin’s appeal.
“Analysts still expect a stimulus bill to pass after the election,” OKCoin STATED. “Should that happen, Bitcoin will likely continue its ascent. Why? Status as a hedge against monetary inflation will gain further traction.”
Institutional capital is already making that choice. CoinDesk reported that asset management giants – Charles Schwab, Fidelity, and Vanguard – have purchased the so-called blockchain stocks. One of the beneficiaries, Riot Blockchain, is a Canada-based Bitcoin mining firm.
Meanwhile, reports that Chinese investors are actively pursuing opportunities in the Bitcoin space have also appeared after their state media published a string of pro-crypto articles. BlocDesk covered the story here.
“Nothing has changed since this post over a month ago,” said independent market analyst Credible Crypto. “I remain macro bullish and still think this is the last big BTD opp we will get till 14k+. The ideal “path” is below based on the idea that 10.4-10.5k holds in the short/mid-term.”
TraderXO, a pseudonymous analyst, noted Bitcoin hanging above its 21-weekly moving average. He expected the cryptocurrency to break lower and test a so-called mid-range that lurks around the $9,000-support level.
“0.75 range and 21MA Losing both gives me further conviction this is head towards the mid-range for a pullback/corrective leg. I’m not bearish bitcoin – I’m just looking for solid buying opportunities – unfortunately, it’s not here for me.”
Meanwhile, a pullback from Triangle support, as shown in the first chart above, would mean a retest of the upper trendline. That sits near $11,000.