Bitcoin buyers are taking profits after a rally towards $42,000 over the weekend. The cryptocurrency appears to be overbought and could find support around $34,000, which is the midpoint of a two-month range. The intermediate-term uptrend is improving after a near 30% rally from the July 20 low around $29,000. Buyers could remain active at lower support levels given the loss of downside momentum over the past month.
The decline puts Bitcoin back in the top end of a $30,000 to $40,000 trading range that’s been in place since a cryptocurrency rout in May. It touched $42,605 on Sunday, the highest since May. It rallied almost 20% last week, the biggest increase in three months. At the same time, scrutiny of the industry is intensifying. That includes a push by U.S. legislators for stricter rules on cryptocurrency investors to collect more taxes to fund a portion of a planned $550 billion investment into transportation and power systems.
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