Worst bitcoin withdrawal may be over, technical analyst says

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Bitcoin fell about 13% from its all-time high of $ 68,990 on November 10, falling below $ 60,000 on Wednesday.

The BTCUSD cryptocurrency, -0.20%, recently traded at $ 60,135, down 0.8% in the past 24 hours.

Ether ETHUSD, -0.04% is trading recently at around $ 4,230, down 2.2% in the last 24 hours.

After President Joe Biden signed a $ 1 trillion infrastructure bill on Monday, bitcoin and ether slipped on Tuesday. The bill contains tax reporting provisions for digital assets and has drawn criticism from the crypto community over its definition of “broker”.

Despite the sharp decline in bitcoin, Katie Stockton, founder and managing partner of Fairlead Strategies, said the company’s medium-term outlook for bitcoin remains positive.

According to technical indicators, there are already “signs of intraday downside exhaustion” that suggest the worst of the pullback may be over, Stockton wrote in Wednesday’s notes.

“Short-term oversold conditions are at hand for bitcoin, ether and many altcoins, so we would look for their collective withdrawal to mature later this week,” according to Stockton.

Meanwhile, Mikkel Morch, executive director of crypto hedge fund ARK36, wrote in an email that “it’s not yet clear whether the drop was a healthy upheaval in the over-leveraged buy market.”

“Such a reshuffle would be the way for markets to eliminate any short-term structural weakness,” Morch wrote. “In such a case, the pullback would not have hurt the macroeconomic outlook and we would expect a stronger rebound if the broader fundamentals remain positive.”

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