The defeat of bitcoin sees the $ 30,000 floor as the next line in the sand | Crypto news

The collapse of bitcoin has pushed it through almost every recent level of technical support, forcing retailers to view $ 30,000 as the next line in the sand.

The world’s largest digital asset sank on its sixth straight day of decline, with the token falling about 20 percent in the past seven days. It is now 50% below its peak in November and traded up $ 32,970 on Monday, the lowest level since July.

The coin’s sell-off pushed it to its best-selling since March 2020, based on its 19-year relative strength index (RSI). Bitcoin is now approaching a $ 30,000 support region, where some analysts say it finds the most -close level. Assets are considered overbought if their RSI exceeds 70 and resold if it falls below 30.

“The 50% drop is not as significant as we’ve seen in previous years, but it’s significant now, so it’s a bigger concern,” said Simon Peters, eToro’s market analyst. “The real level of support seems to be around the $ 30,000 level we tested in May after the ban on bitcoin mining in China.

Chart showing $ 30,000 as a new level of support for bitcoin

Wilfred Day, head of Securitize Capital, Securitize’s asset management division, said $ 30,000 was psychologically important and Bitcoin needed to find some support there. But, he added, if the sell-off continued above $ 27,000, “miners who entered the bull market early will be in trouble.”

Crypto has come under widespread pressure from sales in recent days, with traders pointing to hawk signals from the Federal Reserve as a reason for withdrawing risky assets, including technology-rich stocks.

Traders often turn to technical analysis for cryptocurrencies, given their volatility. And to see how sharp the decline was, think about it: less than two weeks ago, traders considered $ 40,000 as a key level of support. Bitcoin is now trading about 15% below that level. Meanwhile, other cryptocurrencies are also down, with Ether priced at $ 2,240, which is significantly lower than its November high of about $ 4,860.

“The market capitalization of cryptocurrencies has risen dramatically and its price has risen sharply due to the Fed’s beef, and the Fed’s tightening path takes liquidity out of the system and nullifies strange estimates that are out of step with real use,” said Avi Felman. , portfolio manager at BlockTower.

The 40-day correlation coefficient for Bitcoin and the Nasdaq 100 technology index reached almost 0.66, the most in data collected by Bloomberg since 2010. A similar correlation with the S&P 500 is also historical.

Here is what other market observers said:

Leah Wald, CEO of Valkyrie Funds: “This sale is largely the result of the entry of traditional markets into adjustment. The story that bitcoin is an uncorrelated asset obviously doesn’t hold up, and the idea of ​​safe haven status seems a bit naive. This is not to say that this will not happen in the future, but bitcoin is now a risky asset and all other digital assets have historically gone, as has bitcoin.

John Venverlo, Chief Operating Officer of Hypernet Labs, cyber infrastructure provider: “Federal interest rate policy, inflation, supply chain shortages and continuing global unrest are adversely affecting markets of all kinds. Crypto is not immune to widespread changes in investor confidence, and that will pass.
According to people familiar with the matter, the Biden administration is preparing to launch an initial government strategy for digital assets and instruct federal agencies to assess the risks and opportunities they pose.

“The market is much more susceptible to negative news, as we have seen over the last weekend and the last few weeks,” said James Malcolm, head of currency research at UBS. “And this creates a very unstable environment, because many people who have amassed coins are now beginning to come under pressure.”

“With the help of Kenneth Sexton and Olga Harif.”

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