Analysts weigh in after bitcoin falls to its lowest since October 6. (Photo Illustration by ... [+] Chesnot\/Getty Images)<\/p>\n
Bitcoin prices declined today, falling to their lowest since early October, and setting their latest multiweek low. <\/p>\n
The worlds largest digital currency by market value dropped to $53,359.80, CoinDesk data shows. <\/p>\n
At this point, it was trading at its lowest since October 6, additional CoinDesk figures reveal. <\/p>\n
After falling to its lowest point in more than seven weeks, bitcoin prices bounced back, climbing above $57,000 later in the day. <\/p>\n
[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.]<\/p>\n
Recently, bitcoin prices have repeatedly moved toward $53,000, a level that some analysts have identified as providing key support. <\/p>\n
While the digital currency has made attempts on that level, they have all been unsuccessful. <\/p>\n
Several technical analysts weighed in on the implications of bitcoins repeated failure to convincingly break through support near $53,000.<\/p>\n
Beginning Friday, Bitcoin began testing the support at about $53K, said Joe DiPasquale, CEO of cryptocurrency hedge fund managerBitBull Capital. <\/p>\n
Each time it fell to that level, it bounced higher, signaling strong support there, he added. <\/p>\n
Todays dip to just over $53K led it to bounce back to a higher price, added DiPasquale. <\/p>\n
This signals that we have strong purchasing interest at that level. When repeated support this happens, it is evidence of demand at that level and a bullish signal that the asset will appreciate from there. <\/p>\n
Dylan LeClair, head of market research for Bitcoin Magazine, also commented on the situation.<\/p>\n
$53,000 is a key level, which happens to be the average on-chain cost basis of short term holders in the market, he noted, citing market data. <\/p>\n
Throughout bitcoins history the realized price (on-chain cost basis) of short term holders has served as key bull market support. <\/p>\n
Konstantin Anissimov, executive director at CEX.IO, also spoke to key level. However, he offered a different take on the matter.<\/p>\n
We see three factors contributing to $53k serving as strong support, he stated.<\/p>\n
Bitcoins market cap is $1 trillion at $52,950 USD. This level has been key support\/resistance through 2021 and is now being retested as support again. <\/p>\n
The chart below illustrates what Anissimov described.<\/p>\n
This chart shows how the $1 trillion market cap served as key support and resistance. <\/p>\n
Further, he spoke to other developments that might interest market observers. <\/p>\n
Recent selling pressure is largely forced via liquidations with minimal signs of selling\/capitulation from long-term market players, stated Anissimov. <\/p>\n
This suggests the ~23% decline off all-time highs isnt a larger trend reversal. Since November 10 (day of ATH) there have been $968 million USD of liquidations. <\/p>\n
This chart shows the dollar value of liquidations (both daily and in total) since November 10, when ... [+] bitcoin hit its all-time high. <\/p>\n
Finally, Anissimov spoke to market sentiment. <\/p>\n
He mentioned the BTC Fear and Greed Index provided by alternative.me, emphasizing that it was at 27 when he provided this input. The figure had increased to 33, a figure that also pointed to fear, at the time of this writing. <\/p>\n
BTC has hovered in the fear to extreme fear level of the index, which is usually the case after weaker handed holders have exited the market.<\/p>\n
The Fear & Greed Index from alternative.me shows that the sentiment surrounding \"Bitcoin and other ... [+] large cryptocurrencies\" is fearful. <\/p>\n
In addition to emphasizing the key support provided near the $53,000 level, LeClair outlined several important factors for market observers to watch going forward. <\/p>\n
He spoke to the derivatives market, noting that although a complete flush of long biased derivatives have yet to occur, funding on perpetual swaps remains moderately high, but nothing too extreme or worrisome. <\/p>\n
The macroeconomic backdrop and the potential for the Fed to delay tapering the current pace of balance sheet expansion is something bitcoin traders are watching closely, added LeClair. <\/p>\n
Also, a rising dollar against other foreign currencies as seen in the dollar currency index (DXY) over the course of 2021 is also of significance, and should be watched closely. <\/p>\n
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.<\/p>\n
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Excerpt from:<\/p>\n
Bitcoin Reached A 7-Week Low TodayHere's What Traders Should Know - Forbes<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Analysts weigh in after bitcoin falls to its lowest since October 6. (Photo Illustration by ... Continue reading