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Bitcoin was put under pressure before the US government hearings on Facebook's cryptocurrency Libra on July 16-17.
The price of a single bitcoin, which was around $ 13,000 five days ago, fell below the $ 10,000 mark earlier today and tested the 50-day moving average at $ 9,900 for the first time since February 18th.
David Marcus, head of Calibra for Facebook, one of the entities responsible for governing and developing the cryptography project, is expected to testify before lawmakers sitting on the Senate Banking Committee and the Financial Services Committee on Wednesday.
The upcoming review of Libra could weigh on Bitcoin. After all, previous data show that BTC has a tendency to fall before Congressional hearings on cryptocurrencies and to obtain favorable results.
Last year, for example, BTC fell from $ 6,820 to $ 6,070 in five days to July 12, before rising to $ 7,400 on July 18 when the House Financial Services Committee met Is gathered for an audition on "crypto as a new form of money".
More importantly, the cryptocurrency remained in the auction the following days and reached a maximum of $ 8,500 on July 24 (according to data from Bitstamp) because the audience had not taken a too negative tone.
On the same model, the BTC rose from $ 12,000 to $ 6,000 in the 10 days before the hearing before Congress on February 6, 2018, when the President of the Securities Exchange Commission (SEC) and the chairman of the Commodity Futures Trading Commission testified before the Senate. Committee. This audience was also surprisingly positive and BTC returned above $ 11,700 on February 20th.
Farther back, price action before the first Bitcoin congress hearing on November 18, 2013 was slightly different in that cryptocurrency was tightly controlled from $ 85 to $ 650 in six weeks before 'event.
Once again, the audience on the growing popularity of virtual currencies was not anti-crypto, which allowed BTC to extend the rally to highs above $ 1,150 on November 30th.
Will BTC increase this time?
Cryptocurrency backed by Facebook and Libra's public debt is generally seen as a net benefit for Bitcoin, an anti-establishment asset.
This is clear from the fact that BTC increased from $ 9,000 to $ 13,800 in the eight days following Facebook's unveiling of Libra's white paper on June 18.
It is therefore hardly surprising that the main cryptocurrency felt the gravitational pull before congressional hearings on Libra and that it will likely suffer if US lawmakers issue a key for Facebook.
It should be noted that Federal Reserve Chairman Jerome Powell has already called for a halt to the Facebook project until concerns about money laundering protection are taken into account. President Trump also criticized the project in tweets last week.
However, if the hearings are more optimistic, BTC could well exceed $ 13,800 and reach unprecedented records by the end of the third quarter.
For technical charts, short-term prospects will remain optimistic as long as prices remain above $ 9,614 (July 2nd low).
At the time of writing, BTC is changing hands at $ 10,300 on Bitstamp, which represents a decrease of 4.86% on a 24-hour basis.
Daily and 3-day charts
A UTC close below $ 9,614 would invalidate the bullish trend of the lows and confirm a bullish to bearish trend change.
This seems likely with the three-day chart indicating a bearish divergence in relative strength index (RSI). The indicator also moved away from the upward trend line, marking the end of the rebound since December lows.
In addition, the last three candles closed well below the 10-candle moving average, a level that provided significant support throughout the increase, from $ 3,500 to $ 13,880, as discussed on Friday. .
Weekly chart
The long upper strands attached to two of the last three candles indicate bullish burnout, as does the bearish divergence of the RSI.
All in all, the charts are biased down to $ 9,097 (May 30th high), unless congressional hearings are more positive than expected. In this case, prices could exceed $ 13,800, sign of the continuation of the rally.
Time Graph
BTC recovered from its low levels near $ 9,850 to $ 10,300. The lower-high bearish model, however, is still intact. Prices could rise to $ 11,200 in the next 24 hours if the cryptocurrency invalidates the lower downtrend with a move greater than $ 10,732.
Disclosure: The author does not hold any cryptocurrency assets at the time of writing.
Image of the United States Capitol via Shutterstock; charts by Trading View
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