Cryptocurrencies continue to retreat at the start of a new trading week following sharp losses on Friday, with bitcoin is trading dangerously close to fresh November 24th lows below the $8,000 threshold. Any attempts to regain the upside potential face strong headwinds amid the never-ending woes in the volatile market.
In another blow for bitcoin, major US credit card companies have banned cryptocurrency purchases with credit cards in an effort to decrease legal and financial risk. These banks are JP Morgan Chase, Bank of America and Citigroup. Citing the same reasons and crypto market volatility, the UK banking giant Lloyds Bank has also banned its credit card customers from buying cryptocurrency. Many institutions threatened to restrict some operations with digital assets before, but the real steps by the leading banks with a huge customer base can’t but further reduce the appeal of bitcoin which is particularly vulnerable lately. From the technical point of view, the key on the upside in the $8,000 mark as its loss triggered even a more aggressive sell-off on Friday, and now this level is the immediate local resistance. Should the price regain this barrier, the trader focus will turn to $10,000 again. However, in the short-term, the downside risks continue to prevail, and failed recovery attempts signal that investors are not ready to buy bitcoin yet. Therefore, the next bearish target is the $7,500-$7,200 zone.
By Helen Rush
Senior Analyst at Capital Markets