Analysts Identify Bullish and Bearish Scenarios As Bitcoin Price Dips Below $ 56,000

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Cooler heads are calling for a collective deep breath and step back to see the long-term outlook for the future of Bitcoin (BTC) price and the broader crypto market, but today’s fall below. the $ 56,000 raised eyebrows among traders.

Data from Cointelegraph Markets Pro and TradingView shows that after starting the week near $ 60,000, several bear days hammering the price of Bitcoin have resulted in a revision to $ 55,600.

1 day BTC / USDT chart. Source: TradingView

Here’s what analysts have to say about the latest Bitcoin price movement and what to watch out for in the days ahead.

Keep an eye on the monthly close

Independent market analyst ‘Rekt Capital’, who released the following chart showing BTC is on the verge of recovering a significant monthly closing level near $ 58,728, took a closer look at the monthly price development of the Bitcoin.

1 month BTC / USD chart. Source: Twitter

According to Rekt Captial, the price action for BTC has been “promising” so far and is now “very close to recovering that monthly level as support (green)”, but the analysis warned that there could still be a lot of volatility in the near term as the market closes November.

Rekt Capital said,

“But it’s important to note that BTC could still easily switch like this for the rest of the month. The monthly shutdown is what matters. Gox trustee to distribute 145,000 BTC

An overview of the possible reasons for the withdrawal was offered by David Lifchitz, Managing Partner and Chief Investment Officer at ExoAlpha, who highlighted the November 16 announcement that the administrator of Mt. Gox who will distribute around 145,000 BTC to investors in retail who had bought them on the exchange between 2013 and 2015.

Lifchitz pointed out that there were concerns that many of these “mom ‘n pop investors” who should “receive a windfall in the near future” due to the fact that BTC is 100 times higher than their original purchase price “. will likely cash out at any cost, which will likely hit the market quite hard when news of actual distribution is announced. “

For now, Lifchitz estimates that “the sale appears to be over at the support level of $ 57,000 to $ 58,000” and looks “set to reach $ 63,000 and above again in the next few days.”

But caution is needed to move forward, according to Lifchitz, as the threat of a future sell-off once Mt. Gox BTC is released.

Lifchitz said,

“However, this Mt.Gox is a sword of Damocles over the head of the market, and I don’t see BTC going up to $ 100,000 next month with this threat suspended. The whales held on, but didn’t buy much more. I guess they are well aware of the upcoming drama of Mt.Gox and are waiting to deal with the huge potential drop ahead. Now, once the Mt.Gox hurdle is cleared, Bitcoin will have a clear path to reaching new highs, barring some crazy regulations that could spoil the party.

Related: Metaverse and Blockchain Gaming Altcoins Rally As Bitcoin Seeks Support

Historical analysis suggests Bitcoin price may have bottomed out

A final sneak peek was offered by analyst and pseudonymous Twitter user “TechDev” who posted the following charts comparing the 2017 price action for Bitcoin with the current market.

2017 BTC price action versus 2021 BTC price action. Source: Twitter

According to TechDev, the current correction “follows mid-November 2017 almost perfectly” with the “only minor difference” being “a break out of the 50-day Simple Moving Average (SMA)”.

TechDev said,

“We may not have hit rock bottom, but it’s close. Everything I see suggests a high probability that the next 5-15 weeks will be massive (including BTC and alt mania).

The overall cryptocurrency market cap is now $ 2.51 trillion and Bitcoin’s dominance rate is 41.9%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move comes with risk, you should do your own research before making a decision.

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