Saturday, January 22

Crypto enthusiasts turn to techies for guidance after the crash

In the middle of another hectic day for most cryptocurrencies, digital token fans are turning to technical indicators for clues as to where Bitcoin and Ether may go next.

Bitcoin, mired in a difficult period that has seen it lose close to 20% from its all-time high earlier this month, has been trading below its 50-day moving average, which many see as a bearish development. Ether, on the other hand, managed to bounce off its own trend line on Wednesday.

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The second-largest token sees good round-number technical support at $ 4,000, according to Mike McGlone, a commodity analyst at Bloomberg Intelligence. “It appears to be a battle with the higher-level leveraged longs going down and the longer-term, more institutional supply below the market,” he said. McGlone sees Ether consolidating its bull run within the $ 4,000 to $ 5,000 range.

Cryptocurrencies have been sold in recent days amid a number of concerns, including increased regulatory risks, as well as many tokens being depleted very quickly in a short period of time. The Bloomberg Galaxy Crypto Index, which measures the performance of a handful of the largest tokens, has lost 14% so far this month.

The news that India is preparing a bill to regulate cryptocurrencies appears to be behind the latest stage of the Bitcoin sell-off on Wednesday on exchanges popular with Indian investors. Bitcoin was down nearly 14% at one point on WazirX, while little changed elsewhere.

Some analysts are also citing declining risk appetite in the broader equity market, where nonprofit tech companies have suffered the brunt of the declines.

“We see Bitcoin lose value in valuation when we see a sell-off in the most speculative parts of the stock market,” Art Hogan, chief market strategist at National Securities, said by phone.

On Wednesday, Bitcoin lost as much as 3.1% to trade at $ 55,908, while Ether fell 4.2% at one point to $ 4,168.

The bottom line is that both Ether and Bitcoin held their lows from last week, according to Matt Maley, chief market strategist at Miller Tabak + Co. important. long-term support levels “.

Although Bitcoin has seen a sharp pullback within its medium-term uptrend, it is showing signs of short-term downside exhaustion based on a number of indicators, according to Katie Stockton, founder and managing partner of Fairlead Strategies, an independent research firm. focused on technical aspects. analysis. Also, its oversold conditions increase the likelihood of a bottom being set.

“We expect Bitcoin to resume its medium-term uptrend, allowing it to finally break above resistance near $ 65k for a long-term measured move projection of $ 90k,” he wrote in a note.

© 2021 Bloomberg

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