Bitcoin gave back its entire post-election bounce on Thursday after failing at the 50-day average. It now trades near the 200-day average, and the daily chart shows little support until $65K.
Bitcoin fell about 5% on Thursday and traded near $75,433 late in the session. On Wednesday it had climbed above $80,000 after Democrats swept both chambers of Congress in the midterms.
Stocks and Washington drag crypto lower
The drop came as US stocks sold off broadly. Coinbase, Robinhood, Strategy and Bullish were each down 9% or more, and total crypto market value dropped by roughly $370 billion.
Policy hopes faded as well. Brian Gardner of Stifel said the Clarity Act is "off the table for the lame duck session", and he put the odds of a bipartisan deal in the next Congress as pretty low.
Fundstrat's Sean Farrell offered a brighter view. He said a Democratic win could lift Bitcoin's appeal as a hedge against bigger federal deficits.
The 50-day average turns the rally away
Wednesday's spike ran into the 50-day moving average and stopped there, which confirmed the line as a ceiling. The pullback then pushed price onto the 200-day average, which sits near $76K.
The bigger picture shows why the rally had little footing. Bitcoin is down about 3% over the past week and roughly 12% over the past month.
Momentum points the same way. The daily RSI sits near 38, still above the oversold zone below 30, and the MACD remains below its signal line.
Support is thin until $65K
Below the 200-day average, the daily chart shows little support until $65K. A drop there would extend the slide by roughly another 14% from current prices.
Just beneath sits $63K, and losing it would raise the risk of a deeper flush. The leverage that K33 flagged could force liquidations.
Where Bitcoin closes relative to the 200-day average will likely decide the next move. To undo the damage, bulls would need to reclaim the 50-day line and then clear $82K.
Source: Crypto Daily™
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