The downtrend for Bitcoin (BTC) extended a few notches lower on December 3 after the price fell below $ 54,000 and traders will notice that the daily BTC / USD chart shows a noticeable increase in sales volume.
Investors seem concerned about the emergence of a new variant of Covid-19 and aggressive comments from the Federal Reserve. Meanwhile, veteran investment icon Charlie Munger joined the fire by comparing price action in the cryptocurrency market to the dot-com era that ended with the bursting of the bubble.
Here’s a look at what analysts have to say about the current market and what to watch out for as 2021 begins to wind down.
Strong lower support from $ 52,000 to $ 53,000
The “apathetic” nature of Bitcoin’s price action over the past few weeks was highlighted by cryptocurrency market intelligence firm Decentrader, who noted choppy price action on lower time frames and evidence of a slow downtrend. in high time frames as the cause of the greatest fear of traders. “So that the confinement ends.”
Analysts suggested that once BTC breaks out of its current range, “the most obvious support group is around $ 52,000 to $ 53,000” near the point where the price broke during the May dip earlier in the year.
“If we get a deeper correction, then a strong support area is around the 200DMA at $ 46,200 and the lower support level of $ 44,300. On the upside, a significant resistance level is at the round number of $ 60,000. “
Bitcoin and Ether are “for sale” at these levels
While many have been put off by the recent Bitcoin price action, David Lifchitz, Managing Partner and Chief Investment Officer at ExoAlpha, suggested that “Bitcoin and Ether were bought” on sale “when they hit $ 54,000 and $ 3,900 for those. they were able to collect them at those levels.
According to Lifchitz, Bitcoin’s price continues to be hampered by “the Mt. Gox liquidation saga” and suggested that BTC investors are likely to “remain cautious ahead of the expected distribution sometime in the first quarter of 2021.”
Lifchitz also highlighted the spread and impact of the Omicron variant of Covid-19 as a situation to be aware of, as “a serious outbreak leading to lockdowns would definitely weigh on the market initially.”
Lifchitz suggested that this could lead to another round of government stimulus, “which would increase global debt and weaken currencies against gold and cryptocurrencies, while at the same time fun money could be exchanged for immutable money like Bitcoin.”
“So after an initial panic-induced drop, cryptocurrencies could take advantage of such an outcome if we refer to what happened previously, even if this remains highly speculative. In the coming weeks we will know if Santa is coming this year or if he will remain locked in with Covid! “
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It’s starting to look like September 2021 again.
Pseudonymous Twitter user and analyst ‘Rekt Capital’ provided insight into how the current price action is similar to a price pullback that occurred earlier in the year. aware The graph below shows this most recent reduction along with the reduction in the price of BTC that occurred in September 2021.
Rekt Capital said:
“In September, BTC fell -25%. This is when BTC investors got extremely fearful. Then BTC reverted to new ATHs. Now, BTC is down -23%. The Fear and Greed Index is likely to show Extreme Fear very soon. Similar recoil depth. Similar sentiment from investors. “
The overall cryptocurrency market capitalization is now $ 2.531 trillion and Bitcoin’s dominance rate is 41%.
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