FX.co ★ Technical analysis of BTC on September 28, 2021

The cryptocurrency market has recently been relatively stable with major digital assets consolidating. However, amid the recent crackdown on cryptocurrency trading in China and South Korea, volatility increased significantly. The main impact was on bitcoin. As a result, the price tumbled breaking the important support level on September 27.

BTC lost 5% yesterday. Today, it is trading around $41.6K in a strong support area. At the same time, the trading volume keeps falling. A breakout at $42,9K only made things worse. On the H1 chart, the coin is bearish. The charts do not give a complete picture of what is happening. The news of China's recent ban on all cryptocurrency transactions triggered market jitters. However, a Chinese trader says it is still possible to conduct local cryptocurrency transactions. Despite all that, the leading crypto platforms started limiting trading options for Chinese users. Meanwhile, a massive transfer of the coin has a negative impact on the network.

In addition, China blocked two popular websites. At the same time, Alibaba will prohibit the sale of cryptocurrency mining equipment. All this may harm the BTC network and cause problems with the bitcoin and ether hash rate. Likewise, South Korea is suspending over 30 crypto exchanges. The same number of applications were submitted to the regulator to carry out activities on the territory of the country. According to on-chain analysis, the number of bitcoins kept for more than 3 months has decreased to its lowest level since 2015, suggesting a mass sell-off as well as other BTC transactions.

On the one hand, it triggered market jitters. Moreover, it happened at the same time the FOMC meeting took place. The regulator discussed the possibility of tapering and interest rates hikes already in 2022. The stock market reacted cooly to the outcome of the meeting. Nevertheless, investors started to revise their portfolios, thus affecting the market. On the other hand, the cryptocurrency market keeps operating owing to bitcoin holders. In addition, there is an increase in the number of wallets with 100+ BTC in them, which shows the interest of retail investors in the digital asset.

An important factor that confirms a rise in BTC holdings in the market is that 9.5% of wallets were created between August and September. At the same time, by analyzing the on-chain metric, it can be assumed that addresses that purchased coins during this period are in the red. The chart reflects a downtrend caused by a low return on investments in bitcoin in the past month.

As for the daily chart, the price broke 3 important support levels of $42.9K, $42.6K, and $42K. Yesterday, trading closed with the formation of a bearish candlestick having a long upper shadow. This indicates the continuation of the downward trend. The market is expected to remain bearish according to the technical indicators on the daily chart. The MACD is moving along the zero line. The Stochastic and the RSI broke the 40 line and keep moving down, reflecting the possibility of an increase in short positions. At the same time, a bearish triangle was formed on the daily chart, signaling the possibility of an upward trend.

On the H4 chart, the Stochastic and the RSI reversed towards the sideways movement. The bearish MACD crossing below zero occurred, signaling the continuation of the downward trend. The market is expected to be bearish in the short term. The price may re-test the $40K mark with an unlikely rebound from the $40K-$41.5K range. There is a lack of strong buyers in the market due to a massive accumulation that does not involve range trading. Therefore, at this point, it is wise to purchase BTC for long-term holding.