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Bitcoin has twice bounced off the $ 42,000 level today. (Photo by Yuriko Nakao / Getty Images)
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Bitcoin prices have suffered in recent times, falling to nearly $ 42,000 today and reaching their lowest level in more than three months.
The world’s largest digital currency by market cap fell to as low as $ 42,102.35 this afternoon, according to data from CoinDesk.
At this point, the cryptocurrency was trading at its lowest since February 8, additional figures from CoinDesk reveal.
These latest declines are part of a more sustained trend of weakness, as bitcoin has lost more than 30% since hitting an all-time high of nearly $ 65,000 in mid-April.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Bitcoin is melting
Yesterday, Michael Kramer, founder of Mott Capital Management, LLC, wrote a blog post stating that Bitcoin is melting.
At the time of writing the article, the cryptocurrency was trading near $ 44,000, and Kramer noted that digital currency could fall further.
Several analysts intervened, highlighting recent declines in digital currencies, as well as the direction the innovative asset could take.
Bitcoin isn’t completely melting, but we are seeing the first large-scale correction since the bull run began in early 2020, said Nick Mancini, research analyst at Trade The Chain, a crypto sentiment data provider.
Bitcoin is now at 35% of its all-time high of $ 64,900 in April, and it seems a combination of weakened sentiment, caused by the CPI numbers, and negative Elons tweets are behind. the recent fall, he said.
We are currently seeing a close to 1: 1 correlation between sentiment and price action, Mancini said, citing data compiled by Trade The Chain.
Sentiment is currently at an all-time low so we are also watching for a low in price action.
Jason Lau, COO of the OKCoin cryptocurrency exchange, also spoke about how investor mindset plays a key role in the markets.
Bitcoin is down around 34% since it hit an all-time high 34 days ago. This recent move reflects a shift in sentiment – as many have started to look at other crypto opportunities beyond BTC and spread disinformation along the way.
Bitcoin has entered sell mode
The Bitcoin chart is now in sell mode, said Julius de Kempenaer, senior technical analyst at StockCharts.com.
Over the weekend, BTC fell below its recently formed support level of $ 47,000. The breakout below that level started a new series of higher highs and lower lows meaning the chart is now in a confirmed downtrend over the daily period, he said.
The next level of intermediate support is between $ 42 and $ 43,000, which has already been tested today and is rebounding so far.
Katie Stockton, Founder and Managing Partner of Fairlead Strategies, LLC, also spoke, describing the $ 42,000 level as key support.
There is no sign of depletion on the downside as bitcoin’s tests level off, which is more likely in two weeks, based on how my overbought / oversold indicators are currently set.
Pankaj Balani, co-founder and CEO of Delta Exchange, offered his perspective, speaking on key levels of support.
Despite a strong correction and BTC price trading in the $ 42,000 to $ 44,000 support area, we don’t believe Bitcoin has found a bottom yet, he said.
Unlike previous declines in Bitcoin – over the past 9 months – this time around, we don’t find any buyers looking to fish bottom during a steep drop. Most traders are convinced of a further decline and are considering levels of 35,000-38,000 on BTC.
Sean Rooney, head of research at Valkyrie Investments, also spoke of the potential drawbacks, citing information he extracted from blockchain analysis.
Short-term traders and investors should keep in mind that from a chain analysis perspective, large bitcoin deposits have been pouring into the exchanges. This could be a signal that the selling pressure has not abated for the current downtrend and that lower prices are indeed possible.
Bullish outlook
Despite recent problems with digital currencies, several market watchers have offered optimistic outlook on its future prospects.
Despite the negative sentiment, fundamentals look strong, with Bitcoin’s hash rate and active addresses recently reaching all-time highs, Lau said.
Bitcoin’s next Taproot upgrade also appears to be on the right track, with nearly 80% of miners reporting their support.
William Noble, chief technical analyst at cryptocurrency data provider Token Metrics, also addressed the issue, focusing on recent market history.
I think when it comes to graphics, you have to think about seasonality, he noted.
Last year, the fire was hard between the end of May and August. We expect history to repeat itself, Noble said.
Anyone who sells now will regret it later. The phrase don’t sell the dip has never been more apt, he said.
Crypto is for the people. When the DeFi space wakes up, people will laugh at those who were selling in panic in mid-May.
Disclosure: I own bitcoin, bitcoin cash, litecoin, ether, and EOS.
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