Bitcoin prices fell significantly today, falling to their lowest in nearly two months and repeatedly falling below $53,000, a level identified as critical support.
Following this drop, the cryptocurrency recovered, rising above $54,000 before falling back below $53,000 this evening.
At the time of writing, the digital asset was worth around $53,000.
[Editor's note: Investing in cryptocoins or tokens is extremely speculative, and the market is largely unregulated. Anyone thinking about it should expect to lose their entire investment.]
Several analysts addressed this level, emphasizing its significance.
"The support near $53K is important to us as well," said Katie Stockton, founder and managing partner of Fairlead Strategies, LLC.
In addition to providing a short-term outlook, William Noble, the chief technical analyst of research platform Token Metrics, weighed in on this level.
"53k was the previous high from September," he explained.
"As a result, that former ceiling may act as a floor in the near term." "53k will most likely provide support for a portion of the weekend," Noble added.
"Once equities reopen on Monday, selling in bitcoin may resume," he said.
"If stocks fall, all risky assets, including cryptocurrency, could fall further."
Brett Sifling, an investment advisor with Gerber Kawasaki Wealth & Investment Management, also commented.
"The other analyst's assessment sounds accurate; we'd expect Bitcoin to have support around the $50,000-$53,000 level," he said.
"People are psychologically drawn to placing buy/sell orders in round numbers such as $50,000." "That same level was previously a resistance point, and it is now being tested as new support," Sifling explained.
"If we don't hold $50,000-$53,000, we see support at the $45,000 and $40,000 levels," he said.
Kiana Danial, CEO of Invest Diva, also weighed in on what might happen if bitcoin works its way through existing support.
"On the daily chart pattern, BTC/USD has formed a double top bearish reversal chart pattern," she said.
"Friday's dip was a test below both the 38 percent Fibonacci retracement level and the lower band of the daily Ichimoku cloud; both of which are important psychological levels," Danial explained.
"The Ichimoku cloud for the future appears bearish." "Confirmation of a break below this level (at around $53K) could indicate further bearish momentum, pushing the Bitcoin price lower towards the 50% and 61 percent Fibonacci retracement levels at around $49K and $44K, respectively," she said.
"Keep in mind that such volatility is normal for cryptocurrencies like Bitcoin," Danial said before predicting a bullish future.
"Once the pullback is complete, there's a good chance Bitcoin will bounce back up and set new highs in the new year."
Shiliang Tang, chief investment officer at cryptocurrency investment manager LedgerPrime, also took a bullish stance, claiming that the recent price drop was a net positive for bitcoin's future price movement.
"This drop certainly tracked the drop in equity prices that we've seen as a result of Covid fears and inflation concerns," he said.
"However, while the crypto and equity markets tend to fluctuate in lockstep, they are distinct markets, and crypto, in particular, is in a strong bull cycle."
"Moreover, the on-chain metrics for Bitcoin – the king crypto to track in a bull run – are still strong: more coins are being taken off exchanges than flowing onto them," Tang said.
"This means that once this flushing out is complete, we should see a supply shock in which Bitcoin's price explodes upwards," he predicted.
"If anything, this dip did more to wash out those rogue leverage traders, creating a healthier environment for further price rises in the near future."
I have some bitcoin, litecoin, Ether, Doge, ADA, and Sand.
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