Bitcoin is trading lower in its pairing with the US Dollar on Wednesday, as a renewed selloff in the crypto market pressurizes the pair once more. BTCUSD is currently trading at 7,980, having touched off an intraday low of 7903 earlier in the session.
This renewed dip below the $8,000 mark by BTCUSD is coming as the markets prepare for the expiry of the BTC futures on CME on Friday. According to information monitored from the exchange, the Bitcoin futures front end monthly asset on CME (BTCV2019) is now at sub-$8000 levels with intensification of selling pressure. Trading volumes have also dropped on a month-on-month basis from $US5.9 billion USD in August to a $US4.82 billion in September. Open interest has however surged from 2,873 to 4,629 contracts for Q3 2019, according to data from Coindesk.
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Technical Outlook on BTCUSD
Open interest on Bitcoin is increasing because many traders are joining the uncommitted group. A look at CFD contracts on some of the popular exchanges shows a marked drop in the long positions on BTCUSD, which reflects the selloff being experienced in the market.
The weekly chart on BTCUSD reveals price rejection at the former support at 8289, which is now acting as a resistance in role reversal. This price level was tested on Monday and Tuesday and it held firm.
With little upside momentum, price has resumed its downward trajectory. BTCUSD could therefore test the floor of the range identified in my article earlier in the week, formed by 8289 above and 7707 below (blue support line on chart).
A break below 7707 could bring a renewed test of the price support constituted by the 23.6% Fibonacci line (6950), but the support zone could extend up to 7007.
In contrast, a bounce at 7707 will re-launch price into a position for a renewed assault at the 8289 resistance (range ceiling).
It is also possible for us to see some significant range trading in the next few days if price is unable to break either range barrier.