Bitcoin’s uptrend to face significant challenges

Last week, BTCUSD breached a significant resistance range between $94,000 and $95,000, which had capped price gains for the past two months. However, yesterday’s trading session ended with a sharp decline, bringing quotes back near the uptrend drawn from November lows. With Bitcoin clinging to the area above the trendline, opening short positions doesn’t seem tempting enough. Keep your hand on the pulse of the current situation: once this level is broken, the price is likely to target $87,000.

Technical indicators—the Relative Strength Index (RSI) and the Stochastic Oscillator—are nosediving, suggesting that bears are seizing the initiative. On the daily chart, BTC fell below both the 50-day moving average and the middle Bollinger Band. This may be a sign of an even deeper correction ahead. Therefore, it would be safer to sell Bitcoin only upon a confirmed break of the uptrend. Otherwise, the trendline could push the price up to $95,000.

The past week was a triumph for the crypto market since early October, but the Greenland crisis soured market sentiment. Although supporters view digital assets as a potential capital haven, the reality proves to be different. Escalating geopolitical tensions triggered the liquidation of BTCUSD long positions worth over $800 million. The challenges with adopting cryptocurrency legislation in the US are not inspiring optimism either.

Coinbase CEO Brian Armstrong said that the current version of the crypto bill is not favored by industry leaders. According to officials, most regulatory control would be granted to the Securities and Exchange Commission (SEC). Armstrong and his colleagues, however, advocate entrusting these functions to the Commodity Futures Trading Commission (CFTC). Due to disagreements, further consideration of the bill in the Senate has been postponed indefinitely.

Take into account the following trading plan:

Sell BTCUSD upon breaking the trendline top-to-bottom. Place Take profit at $87,000. Set Stop loss at $95,000.