According to the price analysis by John Todorov, a senior trader at dagx.live, Bitcoin (BTC) prices took a beating on the news that Chinese authorities had raided and shut down the Shanghai offices of leading cryptocurrency exchange Binance. Though Binance rebutted the media reports, the damage had already been done.
The analyst from dagx.live crypto trading platform, said that BTC becomes more appealing during times of global uncertainty. They also agreed that BTC would eventually become a store of value and act as digital gold.
The BTC/USD pair is trading inside a falling wedge pattern. The bulls are attempting to defend the support line, which is just below the 50-week SMA and 61.8% Fibonacci retracement of the rally from $3,236.09 to $13,973.50. As there are several supports close to the current levels, we expect a bounce off it.
If the bulls can push the price above $7,337.78 to $7,702.87 resistance zone, chances of a deeper fall would decrease. Above $7,702.87, he anticipates a move to the resistance line of the wedge. A breakout of the wedge will resume the move up.
Contrary to his assumption, if the bears sink and sustain the price below the support line of the wedge, a fall to 78.60% Fibonacci retracement level of $5,533.90 is likely. Instead of panicking, investors should start building positions if the price sustains above $7,702.87.