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Bitcoin price suffered a significant drop this morning, to its lowest level in nearly two months and continuously dipping below $53,000, a level that has been identified as a key support area.
According to data from CoinDesk, at one point, the leading cryptocurrency hit $51,808 early this morning. This is the lowest level recorded since October 6, additional figures from CoinDesk reveal.
After the sharp drop above, Bitcoin rebounded and rallied above $54,000, before repeatedly dropping below $53,000.
At the time of this writing, the price is trading around the $53,000 mark.
Several analysts have talked about mentioning this milestone and emphasizing its importance.
For example, Katie Stockton, founder and managing partner of Fairlead Strategies, LLC, says:
“The support near $53,000 is considered important to us, but so far, they hold.
Today’s weakness can be traced back to a sharp drop in recent high growth stocks, which seems to be quite similar to what happened for Btcoin in Q2.”
William Noble, chief technical analyst at research platform Token Metrics, also weighed in on the $53.00 figure and offered a short-term outlook:
“$53,000 is the high of September. So that old ceiling could act as a floor in the near term. $53,000 is likely to act as support for the weekend.
After stocks reopen on Monday, Bitcoin price could rise again. But if stocks continue to fall, all risk assets including cryptocurrencies could fall further.”
Brett Sifling, investment advisor at Gerber Kawasaki Wealth & Investment Management, also considers:
“The assessment of other analysts sounds correct, we expect Bitcoin to gain support around $50,000 – $53,000.
Psychologically, people usually place buy/sell orders at round numbers like $50,000. This is also previous resistance and is currently being tested as new support.
Alternatively, we should see support at $45,000 and $40,000 if the $50,000-$53,000 zone fails to hold.”
Kiana Danial, CEO of Invest Diva commented:
“BTC/USD has formed a double top bearish reversal pattern on the daily chart. Friday’s drop was a test below both the 38% Fibonacci level and the lower band of the daily Ichimoku cloud.
The Ichimoku cloud in the near term signals bearish momentum. Confirmation of a break below this level (around $53,000) could suggest further downside momentum that could push Bitcoin lower at the 50% and 61% Fibonacci levels, around $49,000 and $44,000, respectively.
Remember, such fluctuations are normal for cryptocurrencies like Bitcoin. After completing the pullback, there is a high probability that Bitcoin will rise again and reach new highs in the new year.”
Shiliang Tang, chief investment officer at crypto investment management firm LedgerPrime, also offered a bullish bias, arguing that the latest drop is a positive for Bitcoin’s future price action:
“This drop was certainly influenced by the drop in stock prices, which was caused by fear of the new coronavirus and concerns about inflation.
However, while the cryptocurrency market and the stock market tend to move in tandem, they are different markets and cryptocurrencies in particular are in a strong bull cycle.
Furthermore, Bitcoin’s on-chain metrics are still very strong: more BTC is taken out of the exchange than is deposited. This means that in the near term, we will see a supply shock, when the Bitcoin price will explode.
If anything happens, this volatility will help weed out the weak hands, thereby establishing healthier conditions to continue to push prices up for the foreseeable future.”
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