Bitcoin has perilously fallen back below $8,000 as the market anticipates Mark Zuckerberg’s testimony on Libra before the House of Representatives.

The Facebook CEO is expected to defend the launch of Libra in spite of mounting regulatory scrutiny around the company.

The announcement of Libra earlier this year acted as a precursor to Bitcoin’s 350% rally to the upside that climaxed at $14,000 in June.

However, a Senate hearing with Libra co-founder David Marcus highlighted various concerns with the company’s proposed cryptocurrency, notably the decision to base it in Switzerland and the potential threat of destabilising the US dollar.

As the cryptocurrency market anticipates more scathing remarks from US lawmakers and government officials, Bitcoin is on the brink of a major correction below $7,000.

The dreaded death cross on the daily chart is edging closer as the 50 EMA slopes dangerously towards the 200 EMA. There have been two crosses of these moving averages since 2014, both of which resulted in 60% to 70% corrections.

It’s also worth pointing out that since October 7 the 22 EMA on the daily has acted as a point of resistance for Bitcoin, which again is suggestive of a move to the downside.

The $7,900 level of support is also looking increasingly fragile, it has now been tested consistently for the past month and will get weaker with every touch.

Short-term targets remain at $7,400 and $6,750 although $5,900 may come into effect depending on the volume and volatility of the downswing in price.

From a bullish perspective, if positive comments come out of the Libra hearing Bitcoin will need to rally above $8,800 to reject the upcoming death cross, this could provide a platform back into the $9,000 region although a surge in volume is needed.

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