Bitcoin price declined today, hitting its lowest level since early October, and setting its latest multiweek low.
The world’s largest digital currency by market cap fell to $53,359.80, coindesk data shows.
At this point, it was trading at its lowest level since October 6, additional CoinDesk data shows.
After falling to its lowest point in more than seven weeks, bitcoin price bounced back, climbing above $57,000 later in the day.
[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.]
vendor test key support level
Recently, bitcoin price has repeatedly surged towards $53,000, a level that some analysts have identified as providing key support.
While digital currency has attempted at that level, they have all been unsuccessful.
Several technical analysts weighed in on the implications of Bitcoin’s repeated failure to break above the $53,000 support area.
“From Friday, bitcoin started testing support around $53K,” said CEO of cryptocurrency hedge fund manager Joe Depasquale Bitbull Capital,
“Every time it dropped to that level, it jumped higher indicating strong support there,” he said.
DiPasquale said, “Today’s drop is just over $53K, which bounced it” back to a higher price.
“It signals that we have strong buying interest at that level. When repeated support does this, it is evidence of demand at that level and a bullish signal that the asset will appreciate from there.
Dylan LeClair, Head of Market Research bitcoin magazineComment on the situation.
“$53,000 is a key level, based on the average on-chain cost of short-term holders in the market,” he said, citing market data.
“The real price (on-chain cost basis) of short-term holders has acted as a major bull support for bitcoin throughout its history.”
Konstantin Anisimov, Executive Director cex.io, also spoke from the main level. However, he offered a different stand on the matter.
“We see that three factors contribute to the $53k which acts as strong support,” he said.
“Bitcoin has a market cap of $1 trillion at $52,950 USD. This level has been a major support/resistance until 2021 and is now being retested as support again.”
The chart below shows what Anisimov described.
In addition, he spoke of other developments that may interest market observers.
“The recent selling pressure has been forced through massive liquidations, with minimal signs of sell/surrender from long-term market players,” Anisimov said.
“This suggests a ~23% drop from all-time highs is not a major trend reversal. $968 million USD has been liquidated since November 10th (day of ATH).”
Finally, Anisimov spoke to market sentiment.
He referred to the “BTC Fear and Greed Index” provided by Alternative.me, emphasizing that it was at 27 when he provided inputs. the figure was 33. increased to, a figure that also points to fear at the time of this writing.
“BTC is hovering in fear of the index’s extreme fear level, which usually occurs after weak hands holders exit the market.”
other key variables
In addition to emphasizing the key support provided near the $53,000 level, LeClair outlined a number of important factors for market watchers to look forward to.
He spoke to the derivatives market, noting that “although there has not yet been a full influx of long-biased derivatives, funding on perpetual swaps is moderately high, but nothing extreme or worrying.”
“The macroeconomic background and the possibility of the Fed’s delay in reducing the current pace of balance sheet expansion is making some bitcoin traders watch closely,” LeClear said.
“Furthermore, the appreciation in the dollar against other foreign currencies as seen in the Dollar Currency Index (DXY) during 2021 is also significant, and should be watched closely.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, eos and sol.