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Bitcoin keeps falling and returned to its value from a year ago

The cryptocurrency market is trading with low majorities led by Cardano, Solana and Binance Coin up to 5%. Ethereum, for its part, is at US $ 3,100, decreases almost 3% and remains in value similar to those of August.

Bitcoin (BTC) formed a trading pattern on January 8 that is widely watched by traditional analysts for its ability to anticipate further losses according to the latest Cointelegraph technical report.

“The cryptocurrency’s 50-day exponential moving average (50-day EMA) fell below its 200-day exponential moving average (200-day EMA), forming a so-called ‘death crossover.’ The pattern appeared as Bitcoin went through a rough ride in the previous two months, dropping more than 40% from its record of $ 69,000. “

What were other death crosses? An example is a Bearish crossover of the 50-200 day EMA in March 2020 appeared after the price of BTC had fallen from $ 9000 to less than $ 4000. Similarly, a death crossover appeared on the daily Bitcoin charts in July 2021 which, as in March 2020, was further lagging and less predictive. Its occurrence did not lead to a massive sale. Instead, the price of BTC just side-consolidated before climbing to $ 69,000 in November 2021.

But the bearish moving average crossovers in both cases, as mentioned above, accompanied good news, which may have limited its impact on the Bitcoin market.

For example, the recovery in the price of Bitcoin in July 2021 came mainly from rumors that Amazon would start accepting cryptocurrencies for payments, which later turned out to be false, and following a conference, dubbed “The B-Word” , which saw Twitter CEO Jack Dorsey, Tesla CEO Elon Musk, and ARK Invest CEO Cathie Wood speaking in favor of Bitcoin.

Similarly, Bitcoin rebounded sharply from its levels below $ 4,000 in March 2020, primarily after the US Federal Reserve announced its loose monetary policies to contain the aftermath of the stock market crash. led by the coronavirus pandemic.

Why could this time be different?

Bitcoin’s latest crash reflected growing investor concern over the Fed’s decision to aggressively undo its loose monetary policies.including reducing its $ 120 billion a month asset purchase program followed by three rate hikes, in 2022. Rising interest rates generally make holding volatile assets like Bitcoin less attractive Than government bonds, which offer guaranteed returns.

“This is proof that Bitcoin acts as a risk asset,” Noelle Acheson, director of market insights at cryptocurrency lender Genesis Global Trading, told the Wall Street Journal, adding that short-term holders would be the “closest to at the exit”.

As a result, the overall reduction in cash liquidity, coupled with the formation of death crosses, could trigger further sell-offs in the Bitcoin market. However, a break below $ 40,000 may risk sending Bitcoin’s price to support near $ 35,000.

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HELEN HERNANDEZ

Helen Hernandez is our best writer. Helen writes about social news and celebrity gossip. She loves watching movies since childhood. Email: Helen@oicanadian.com Phone : +1 281-333-2229

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