By: Rakesh Upadhyay
The crypto market has been struggling since topping out in June but this does not mean institutional interest in crypto has diminished. The Chicago Mercantile Exchange (CME) Group tweeted that customer interest in CME Bitcoin (BTC) futures remained strong in Q3 2019 compared to Q3 2018. The total increase in open interest during this period was about 61%, which shows that the involvement of institutional traders is on the rise.
From the top of the $7,702.87 to $8,777.89 range, Bitcoin has dipped close to the bottom. After failed attempts by the bulls to break out of the range, the bears will now try to breakdown from it. The critical support zone to watch out on the downside is $7,337.78 to $7,702.87.
If the support zone cracks, the downtrend will resume and the next strong support is way lower at $5,533, which is the 78.6% Fibonacci retracement level of the most recent rally. The downsloping moving averages and the RSI in the negative territory suggest that bears have a slight advantage.
However, as the BTC/USD pair has bounced near $7,702.87 on three occasions, we expect the bulls to defend this area. A bounce off this support will extend the stay inside the range for a few more days. Aggressive traders can maintain the stops on the long positions at $7,700.
The next few days are critical for the cryptocurrency because a decisive breakdown will be a huge negative, but a strong bounce will indicate demand at lower levels and possibly offer a low-risk buying opportunity.