Cryptocurrencies have been selling off in recent days due to concerns about regulatory risks.
New Delhi: In the midst of another volatile day for most cryptocurrencies, digital token enthusiasts are turning to technical indicators for clues as to where Bitcoin and Ether could go next.
Bitcoin, mired in a nightmare that has seen it lose nearly 20% since its record 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, on Wednesday managed to break out of such a trendline of its own.
According to Mike McGlone, commodities analyst at Bloomberg Intelligence, the second-largest token is digitally backed well at $4,000. “It seems to be a battle with long-term leverage from higher levels and longer-term, more institutional bids below the market,” he said. McGlone sees Ether consolidating its rally in the $4,000 to $5,000 range.
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Cryptocurrencies have been sold off in recent days due to a number of concerns, including greater regulatory risks as well as many tokens that increased in price 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.
News that India is preparing a bill to regulate cryptocurrencies appears to be behind the latest 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 also cite that risk appetite is waning in the broader stock market, where unprofitable tech companies have borne the brunt of the decline.
“We see Bitcoin down as we see a sell-off in the more speculative parts of the stock market,” said Art Hogan, strategist by phone at National Securities, Art Hogan, chief market strategist at National Securities. chief market analyst at National Securities, said by phone.
On Wednesday, Bitcoin lost as much as 3.1% to trade at $55,908, while Ether dropped 4.2% at one point to $4,168.
Crucially, both Ether and Bitcoin are holding onto their lows from last week, according to Matt Maley, chief market strategist at Miller Tabak + Co. “Those lows – $55,500 on XBT and $4,000 on XET – are the more important short-term support levels. ”
According to Katie Stockton, founder and managing partner of Fairlead Strategies, an independent technical research firm, although Bitcoin has seen a sharp decline in its mid-term uptrend, it has are showing signs of exhaustion in the short term. analysis. Plus, its oversold conditions increase the chances of it being placed low.
“We expect Bitcoin to resume its medium-term uptrend, allowing it to eventually break through resistance near $65k for a measured long-term move of $90k,” she wrote in a note.
