The Bitcoin (BTC) downtrend extended several notches down on December 3 after the price fell below $ 54,000 and traders will notice that the daily BTC / USD chart shows a significant increase in sales volume.
An index of fear and greed in cryptography. Source: alternative
Investors appear to be concerned about the emergence of a new variant of COVID-19 and hawkish comments from the Federal Reserve. Meanwhile, experienced investment icon Charlie Munger has added to the flames by comparing the cryptocurrency price action with the dot-com era that ended in a bursting bubble.
4-hour BTC / USDT chart. Source: TradingView
Here’s what analysts have to say about the current market and what you should look for when 2021 begins to decline.
Strong support dropped from $ 52,000 to $ 53,000
Cryptocurrency market analyst Decentrader has highlighted the “volatile” nature of bitcoin’s price movement in recent weeks, citing erratic price movements in lower time frames and evidence of a slow downward trend in higher time frames as a reason to increase traders’ fears of a “bull run”. ”
Analysts have suggested that after Bitcoin breaks out of its current range, “the most obvious support range will be around $ 52,000-53,000” near the point where the price collapsed during the May crash earlier this year.
“If we get a deeper correction, there will be a strong support range around 200 DMA at $ 46,200 and lower support at $ 44,300. On the other hand, there is a significant level of resistance in the $ 60k region.”
Bitcoin and Ether are “for sale” at these levels
While many were intimidated by the recent bitcoin price movement, David Lifshitz, CEO and Chief Investment Officer of ExoAlpha, suggested that “Bitcoin and Ether were bought for sale when they reached $ 54,000 and $ 3,900” for those who could pick them up at these the levels.
According to Lifshitz, the bitcoin price continues to be hampered by “Mt. The Gox Liquidation Saga,” and he suggested that BTC investors are likely to “remain cautious in anticipation of an expected distribution sometime in the first quarter of 2021.
Lifshitz also highlighted the prevalence and impact of the Omicron COVID-19 variant as a situation to watch out for because “a severe outbreak leading to a shutdown will certainly initially affect the market.”
Lifshitz suggested that this could lead to another round of government stimulus “that will increase global debt and weaken currencies against gold and cryptocurrencies, while replacing fun money with real money like bitcoin.”
“So after the first downturn caused by the panic, the cryptocurrency could benefit from this result if we point out what happened earlier, although it is still very speculative. Over the next few weeks we will find out if Santa Claus is coming this year or if he stays closed because of COVID! ”
About the topic: The US Infrastructure Act can support digital assets – but first some corrections
Looks like September 2021 again
An insight into how similar the current price action is to the price withdrawal that took place earlier this year was given by analyst and Twitter user pseudonym Rekt Capital, who posted the following chart showing this latest withdrawal together with the BTC price withdrawal that took place in September. 2021
BTC / USD 1-day chart. Source: Twitter
Rekt Capital sa:
“In September, BTC grew by 25%. That was when BTC investors became very scared. Then BTC came back to new ATMs. BTC has now fallen 23%. Fear and Greed Index will probably show extreme fear soon. Similar bounce depth. Emotions from peer investors.
The total market value of cryptocurrency is now $ 2.531 trillion, and bitcoin dominance is 41%.