Technical Analysis of BTC/USD for January 29, 2021

Crypto Industry News:

According to a recent analysis, the upcoming Chinese New Year holiday on February 12 could have an indirect impact on Bitcoin's price and fuel market sales.

According to a Jan. 28 report by investment firm Stack Funds, continued selling pressure on the BTC price is likely to persist in the short term as Asian miners increasingly unload their funds due to the upcoming holiday season.

With more than 60% of the global Bitcoin mining pools in China, Stack Funds head of research Lennard Neo has suggested that a lot of sales pressure comes from Chinese miners. The researcher found that the miner's position index, or MPI, had recently seen a massive increase, indicating a subsequent decline in Bitcoin's price. MPI reached its highest level since 2019 in mid-January 2021.

Neo concluded that the ongoing sale coincides with the coming holidays, suggesting that the reserve price has yet to be known:

"With the upcoming Chinese New Year holidays, we expect the selling pressure to persist in the short term, providing participants with good entry opportunities [...] We also expect this volatility to continue in the weeks ahead, adding to pressure for further price corrections. BTC ".

Chinese New Year, also known as Lunar New Year or Spring Festival, is one of the country's biggest holidays and is usually associated with increased spending. As previously reported by industry media, the cryptocurrency community has long speculated that the Chinese New Year celebrations in the past contributed to the decline in the price of Bitcoin.

Technical Market Outlook:

The BTC/USD pair rally has been capped at the level of $34,123 after a false breakout was made above the short-term trend line resistance. The market has made a Bearish Engulfing candlestick pattern and reversed lower. The intraday technical support is located at the level of $31,144. Please notice, that if the level of $28,930 - $28,471 is clearly violated, then the market might extend the slide down towards the level of $27,000. On the other hand, the bulls must break through $35,000 in order to resume the up trend.

Weekly Pivot Points:

WR3 - $45,492

WR2 - $41,554

WR1 - $36,330

Weekly Pivot - $32,457

WS1 - $27,332

WS2 - $23,540

WS3 - $18,286

Trading Recommendations:

Despite the recent corrective cycle the bulls are still in control of the market. The up trend continues and the next long term target for Bitcoin is seen at the level of $50,000, so any correction or local pull-back should be used to open the buy orders. This scenario is valid as long as the level of $20,000 is clearly broken.

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The material has been provided by InstaForex Company - www.instaforex.com

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