Bitcoin recovers above $7000 following deep correction

• Bulls run out of breath following Sunday's record-setting upsurge.
• Uncertainty over the potential impact of upcoming hard-fork keeps investors at bay. 

Bitcoin surged to a new all-time high near $7600 over the weekend before losing its momentum and recording a sharp drop on Monday. After losing nearly $400 to a fresh daily low at $6950, the BTC/USD pair staged a modest recovery in the late NA session and was last seen trading at $7100, still down 4% on the day.

Although no clear catalysts were identified behind today's deep retreat, investors may be having second thoughts over committing to long bitcoin positions ahead of the highly anticipated Segwit2x software update, which is said to double the size of blocks on the blockchain powering Bitcoin from 1MB to 2MB.

"Without replay protection and with two chains maintaining independent monetary values, the loss of funds for many users on the network will literally be unavoidable due to accidental replay spending, replay attacks and sudden and widespread incompatibility between various software and services," coindesk.com author Ariel Deschapell explained in a recent article.

Technical levels to consider

$7600 (record high) aligns as the first technical hurdle ahead of $8000 (psychological level). On the downside, supports could be seen at $7000 (psychological level), $6300 (20-DMA) and $5700 (Oct. 29 low).