Bitcoin underwent a modest downside correction on Monday as news of another prospective COVID-19 vaccine dampened buying sentiments.
The University of Oxford and AstraZeneca said their experimental drug is up to 90 percent effective against the novel coronavirus. They claimed no side-effects during the trial, adding that their vaccine is storable above zero-degree temperature. If true, it could ease the distribution process, a setback noted in the cure provided by biotech firm Moderna.
Vaccine progress serves as a threat to the ongoing Bitcoin rally because it undermines the asset’s safe-haven appeal. The optimistic news may have affected the intraday buying sentiment in the Bitcoin market, coupled with the cryptocurrency’s struggle at holding $18,500 as support.
The same level had experienced aggressive selling pressure on Sunday. As it happened, the BTC/USD exchange rate fell to as low as $17,610, only to recoup its intraday losses later in the session.
One major that contributed to the consecutive upside rejections near $18,500 is Bitcoin’s overbought status. The cryptocurrency rallied by around 75 percent six weeks in a row, leading to its key momentum indicators to flash an “overbought” signal.
As what typically follows, some traders decided to lock their profits. Meanwhile, others found the correction towards $17,610 as an opportunity to reload their positions for an extended upside target.
Konstantin Anissimov, Executive Director at CEX.IO, told BlocDesk via email that multiple technical indicators suggest that a steep correction is underway. He particularly mentioned the TD Sequential Indicator, a candlestick pattern that identifies a turning point in an asset’s price trend or an index.
“The TD indicator,” said Mr. Anissimov, “is currently on a green eight candlestick on these cryptocurrencies’ monthly charts. This technical pattern hints that a sell signal will develop throughout December in the form of a green nine candlestick.”
Meanwhile, bullish outlooks also clouded over the bearish takes. Many analysts agreed that Bitcoin had entered a so-called institutionalization phase on growing investments from mainstream organizations and billionaire investors (read here).
A report published by a crypto-focused asset management firm, Pantera Capital, further stated PayPal — a global payment giant — is buying 70 percent of the newly-minted Bitcoin supply. That followed up a CNBC interview with the firm’s CEO, Dan Schulman, on Monday. He said:
“When you start to move crypto as a potential funding instrument, I think that bolsters its utility, and stabilizes it as well. It becomes less volatile because it can be used everyday, in your purchases.”
That was enough for Bitcoin bulls to make a further upside case. Nevertheless, Monday remained a quieter day for the cryptocurrency. The vaccine news wins this one.