Bitcoin retraces Friday’s losses, trades near $10,500

• FOMC Chairman Powell voices concerns over digital currencies’ security issues.
• Bakkt Warehouse launches BTC deposits and withdrawals.
• $10,750 remains as critical resistance level for Bitcoin.

After failing to break above $11,000 area, Bitcoin reversed its direction in the second half of the day on Friday and slumped to a low of $10,200 with the initial market reaction to the launch of Bakkt Warehouse, Bakkt’s platform that allows Bitcoin deposits and withdrawals as part of preparations for BTC futures introduction later this month. The subdued market action on Saturday, however, allowed the BTC/USD pair to start retracing yesterday’s losses. As of writing, the pair was up 0.9% on the day at $10,400.

Commenting on the possibility of a central bank digital currency at a panel organized by the Swiss Institute of International Studies (SIAF), University of Zurich, on Friday  Jerome Powell, Chairman of the Federal Reserve System, said that the Fed was not actively considering a digital US currency and called the security issues of digital currencies “quite daunting,” to further weigh on the cryptocurrency market sentiment.

Technical outlook

The Relative Strength Index (RSI) on the daily chart sits near the 50 mark, revealing that neither buyers or sellers seem to be dominating Bitcoin’s price action. On the upside, the initial resistance is located at $10.450 (50-day MA) ahead of $10,750 (Fibonacci 50% retracement of June rally) and $11,500 (Fibonacci 38.2% retracement of June rally).

On the downside, supports are located at $10,200 (Friday’s low/20-day MA), $10,000 (psychological level/Fibonacci 61.8% retracement of June rally) and $9,320 (Aug. 29 low).