Technical Analysis of BTC/USD for October 9, 2020

Crypto Industry News:

According to a landmark decision released on Tuesday by the UK's Financial Conduct Authority, companies in the country will no longer be able to offer retail clients cryptocurrency derivative products such as futures, options and stock quotes.

The decision came almost exactly a year after the regulator first proposed to ban these products. In a statement issued by the FCA, he stated that cryptocurrency derivatives are:

"(...) Inappropriate for retail consumers because of the damage they cause."

Several more specific reasons were given, including concerns that "they do not have a reliable basis for valuation", are subject to fraud and financial crime, and are extremely volatile. Other themes cited include "insufficient understanding of cryptocurrencies by retail consumers" and the claim that retail investors do not have a "legitimate investment need" for these products.

The ban will take effect on January 6, 2021, and the regulator has warned that "because the sale of derivatives and ETNs that refer to certain types of cryptocurrencies is currently banned, and any company offering these services to retail consumers is likely a scam."

"This ban reflects how seriously we take the potential harm to retail consumers associated with these products. Consumer protection is paramount here."

One of the companies most affected by the ban will be CoinShares, which last year ran a campaign to persuade the regulator to drop its plans. CoinShares offers ETN and other types of crypto products targeting traditional markets.

Technical Market Outlook:

The BTC/USD pair has suddenly spiked up towards the level of $10,890 and was stopped at the level of $10,909. This level is the target of 1:1 market geometry of the last wave up and the whole structure was made in three waves only, so the recent dynamic spike up looks very corrective in nature. Any violation of the level of $10,760 will confirm the correction is terminated and the market returns to the horizontal trend. The key short term technical resistance is seen at the level of $10,940.

Weekly Pivot Points:

WR3 - $11,471

WR2 - $11,178

WR1 - $10,858

Weekly Pivot - $10,602

WS1 - $10,300

WS2 - $10,024

WS3 - $9,715

Trading Recommendations:

The weekly trend on the BTC/USD pair remains up and there are no signs of trend reversal, so buy orders are preferred in the mid-term. All the dynamic corrections are still being used to buy the dips. The next mid-term target for bulls is seen at the level of $13,712. The key mid-term technical support is seen at the level of $10,000.


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