Bitcoin’s second attempt to close over $ 16,000 hit a wall on Monday as traders evaluated the latest advances on a coronavirus vaccine.
The benchmark’s cryptocurrency fell 0.77 percent, suggesting that last week’s surge, which took the price to a three-year high, would be reversed in the daily sessions to come. Bitcoin also pounced on technical advantages – to neutralize its overbought status on medium- and long-term charts – as traders posted their profits at the recently set annual high of $ 15,977.
Bitcoin sell-off is accelerating on positive news about coronavirus vaccines. Source: BTCUSD on TradingView.com
Bitcoin sell-off accelerates on positive coronavirus vaccine news. Source: BTCUSD on TradingView.com
Conversely, investors showed an upward trend against the US dollar index (DXY). The exchange rate of the greenback against a foreign currency basket rose by 0.20 percent. Bitcoin and the US dollar index have a positive correlation with each other.
Bitcoin fell Monday on falling bids on safe haven assets. Capital shifted to the US dollar and US stock market after pharmaceutical company Pfizer and its partner BioNTech SE achieved positive results in their vaccine trials against the novel coronavirus.
The news enlivened the fate of pandemic losers such as banks, airlines and travel companies. At the same time, tech stocks that have so far outperformed other sectors performed less well on Monday.
Bitcoin rose significantly against the backdrop of the pandemic and its economic impact. As global central banks intervened with massive stimulus packages and other expansionary monetary policies, investors switched to Bitcoin because of its anti-fiat functions, most notably its scarcity.
After Pfizer announced that its coronavirus vaccine could be more than 90% effective in preventing Covid-19, CEO Albert Bourla said he believed the world could “see the light at the end of the tunnel”. https://t.co/3acYVdSGkV pic.twitter.com/7kCDOAlZIO
– CNBC (@CNBC) November 9, 2020
A vaccine served as a risk to Bitcoin. It increased the ability to heal people to reduce their ability to spread the coronavirus infections. The vaccine, in turn, allowed investors to think more confidently towards reopening economies. It was also suggested to reduce the need for stimulus packages.
The impact of the news was also visible on Gold, a bitcoin rival. The precious metal turned up nearly 4 percent before the opening bell in New York on Monday.
Prior to the vaccine news, Bitcoin showed symptoms of a topping-out ceremony after failing to hit $ 16,000 twice in the past four days.
On the 4H chart, as shown above, the cryptocurrency formed a kind of double top. Technically, the pattern serves as a 75 percent bearish reversal indicator, according to the Samurai Trading Academy.
If this is valid, there is a risk that Bitcoin price will fall towards $ 14,325. Double top support to test the level for a breakdown is moving towards $ 12,700 (the maximum length between the support and the peak of the double top).
Conversely, if Bitcoin shakes off vaccination worries, it could attempt to break above $ 16,000 again to retest $ 20,000, its all-time high.