Bitcoin was seen between gains and losses on Thursday as it tested a key technical level that has tended to act as a floor for the world’s largest cryptocurrency over the past two years.
The digital asset is up 1.1% and was trading around $47,350 as of 9:05 am in New York. It is down more than 15% this month amid a broad comeback in the crypto sector.
Bitcoin’s decline has taken the token to its 55-week moving average, a level it effectively held after the flash crash in December and during the mid-year embers of the crypto route. Technical studies suggest that a decisive break below the average would slide the game to $40,000.
Katie Stockton, founder and managing partner of Fairlead Strategies, an independent research firm focused on technical analysis, pointed out that according to one model, bitcoin has seen a new short-term buy signal. This suggests a two-week rebound, although it is “under-confidence” as conditions do not appear to be oversold, as per another measure, she said.
Bitcoin is the epitome of volatility, and a major question coming in 2022 is whether all of its changes, along with the receding tide of pandemic-era excitement, will eventually leave it low instead of high.
Rosh Singh, CEO and founder of Quadency, says it is possible that retail investors may have been distracted by the massive rallies in some alternative coins.
“It also puts some pressure on bitcoin,” Singh said in a phone interview. Still, he added that “many people in crypto are quite optimistic about next year and think we should see a rally with the way things were going.”
Bitcoin will continue to grow rapidly, an oft-heard-of-crypto proponents remain undeterred, pointing to trends such as increased interest in the sector from a slew of financial institutions.
“This year saw a renewed confidence in the sector with a huge influx of institutional investments into crypto and blockchain mass adoption,” Walid Kaudamani, an analyst at XTB Markets, wrote in an email.
“Eventually that could lead to significant price gains and increased volatility as retail investors try to catch up,” he said.
Bitbull Capital CEO Joe DePasquale agrees that the price may soon recover and that 2022 is likely to be a positive year for bitcoin.
He added, “We can expect relief and a possible recovery drive in the new year. It would be amazing if we see a bear market like 2018 – $100,000 is definitely on the charts, but timing may vary.” , especially as macroeconomic policy changes and regulations begin to emerge later in the year.”
Never miss a story! Stay connected and informed with Mint.
download
Our App Now!!
,