- Sliding for the seventh session in eight days, the weekends are particularly brutal for cryptocurrencies, given diminished volumes can see sharp advances as easily as steep declines.
- Not helping Bitcoin has been its most recent strong correlation with other risk assets, including the tech-heavy Nasdaq 100 and S&P 500.
Given how crypto-fever is a relatively new phenomenon among most investors, the continued decline of benchmark cryptocurrencies like Bitcoin would no doubt have rattled the nerves of those who may be watching their investments at the highs decline by well over 50%.
Sliding for the seventh session in eight days, the weekends are particularly brutal for cryptocurrencies, given diminished volumes can see sharp advances as easily as steep declines.
With Bitcoin now below US$34,000 (at the time of writing), there are growing fears by chart watchers that an unfavorable macro environment could see the benchmark cryptocurrency plunge to below US$32,000 and below the trading range it’s so far managed to keep this year.
And if Bitcoin keeps coming down, there are some technical chart watchers who suggest it could yet test US$28,000 and then US$20,000.
Bitcoin’s trading channel has widened recently to between US$33,000 to US$48,000 – the last time it touched US$32,000 was in July 2021, when a massive deleveraging saw Bitcoin correct sharply.
But after that pullback, Bitcoin went higher on a relentless rally that peaked in November, which saw its price soar to as high as US$69,000.
Since last November however, Bitcoin has been on a gradual decline, marked by brief rallies.
Even the most bullish Bitcoin investors are being whipsawed as some US$475 million in long Bitcoin positions were liquidated over a 24-hour period last week, according to data from Coinglass.
Technical traders will be watching Bitcoin to keep above US$32,000, a key level of support that would keep the cryptocurrency within the trading range, outside of which, a capitulation to the downside could be in the offing.
Not helping Bitcoin has been its most recent strong correlation with other risk assets, including the tech-heavy Nasdaq 100 and S&P 500.
As stocks have been roiled for much of this year, on the back of macro headwinds, Bitcoin and cryptocurrencies have been swept along with them.
