CryptoWatch: Bitcoin’s ‘moment of truth’ is upon us, says technical analyst

CryptoWatch: Bitcoin’s ‘moment of truth’ is upon us, says technical analyst

The mid-July rally in bitcoin is showing signs of petering out. Since hitting a one-month high on July 24, bitcoin as surrendered more than 10%, taking the wind out of the sails of those who had their sights on $10,000 and beyond.

The momentum-killer came with the second rejection of a bitcoin-related exchange-traded-fund submitted by Tyler and Cameron Winklevoss. However, it would be a big mistake to write off the chances just yet, says one market analyst.

“Investors are highly underestimating that if bitcoin futures can trade on a major exchange, then an ETF can,” said Naeem Aslam, chief market analyst at Think Markets U.K. “It’s a huge blunder if they can’t see it coming.”

Read: These may be the 3 biggest hurdles to a bitcoin ETF

The price of a single bitcoin BTCUSD, -1.98% was last valued at $7,554.51, down 1.8% since Tuesday 5 p.m. Eastern Time on the Kraken exchange.

Read: A total collapse in bitcoin is a real possibility, says Nobel Prize–winning economist Krugman

Moment of truth for bitcoin after yet another failure at its 200-day MA

As it did in May, the 200-day moving average, a closely watched long-term momentum indicator, is providing formidable resistance for the No. 1 digital currency. As Rob Sluymer, technical strategist at Fundstrat Global Advisors notes, the level coincides with another popular technical indicator. “In the very short-term BTC, is likely at a pullback/pause point at resistance level coinciding with a 61.8% retracement of the May-June downtrend just below the May 20 highs and near the declining 200-dma,” he said.

After yet another failure at the key indicator, Sluymer said bitcoin is facing a “moment of truth” as it trades near support at $7,400.

The last time bitcoin failed at its 200-day moving average it dropped more than 40% in seven weeks.

Ripple outperforming other altcoins

Ripple is the only major altcoin, smaller coins other than bitcoin, showing gains Wednesday, with a single XRP coin XRPUSD, +3.27% trading 3.2% higher at 45 cents.

Elsewhere, Ether ETHUSD, -3.30% was down 2.9% at $419.96, Bitcoin Cash BCHUSD, -2.37% is trading down by 1.9%, at $754.80 and Litecoin LTCUSD, -0.75% is down 0.8% to $77.10.

Bitcoin futures are under pressure yet again. The CME Group Inc.’s August contract BTCQ8, -2.59% is down 2.3% at $7,555 and the comparable Cboe Global Markets Inc. contract XBTQ8, -2.27%  is trading at $7,540, down 2.2%.

CryptoWatch: Check bitcoin and other cryptocurrency prices, performance and market capitalization—all on one

Providing critical information for the U.S. trading day. Subscribe to MarketWatch’s free Need to Know newsletter. Sign up here.

Related posts