Several market observers weigh in on what’s next for bitcoin.
Bitcoin prices have had an interesting day today, declining to their lowest in more than three months and then bouncing back.
The world’s largest digital currency by market value dropped to $39,677.65 this morning, according to CoinDesk data.
At this point, it was trading at its most depressed value since late September, additional CoinDesk figures reveal.
The digital currency then recovered somewhat, rising above $42,000 during the afternoon and trading near $41,800 at the time of this writing.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Following these latest price fluctuations, where is bitcoin likely to go next? Several analysts weighed in, offering their point of view on the matter.
Julius de Kempenaer, senior technical analyst at StockCharts.com, claimed these latest declines provided additional confirmation of bitcoin’s bearish trend.
“The drop below 45,500 support confirmed the down trend in BTC that is underway after completing a double top formation on the break below 60k,” he stated.
“Breaking below 45.5k triggered another acceleration lower and a test of the next support level around 40k,” the analyst added.
“For now support has come into play around 40k while the old support level at 45.5k can now be expected to start acting as resistance.”
“As long as the series of lower highs and lower lows remains intact, the ease of movement is to the downside,” de Kempenaer emphasized.
“On another break lower below 40k, there is a bit of support around 37k but the main level to watch is around 30k (29.5-32.0k),” he added. “That is where major support is clustered.”
Josh Olszewicz, head of research at Valkyrie Investments, also spoke to a bearish shift that has been taking place in the bitcoin markets.
“As price trend metrics, such as low time moving averages, shifted from strongly bullish to neutral, additional risk-off-related rate hike eventualities and fears are now fueling bearish price action and shifting these moving averages from neutral to bearish,” he stated.
“BTC experienced its first so-called ‘death cross’ this week since June 2021 and ETH is also likely to undergo its first death cross since May 2020 – both of which signify an important shift to declining bullish trend strength since March 2020,” noted Olszewicz.
He also spoke to the digital asset’s historic support, stating that it “sits from $31,000 to $40,000.”
William Noble, the chief technical analyst of research platform Token Metrics, also provided some input on this subject.
“There is very strong support in BTC just below 40k. There may be big buy orders below 40k.”
“I suspect consolidation may be in order this week,” he noted.
“The best support for BTC is 34k,” Noble added. “If BTC hits 34k, a bounce to 52k could come soon after.”
Collin Plume, CEO and founder of My Digital Money, shed some additional light on bitcoin’s price support.
“I think Bitcoin will still see a support level between $42k-$45K,” he stated.
“This dip is influenced by the government increasing yield bonds, reducing money printing, increasing interest rates, and reducing its balance sheet. This is sending investors to bonds and other more conservative assets,” said Plume.
“Then, there is the addition of several countries banning bitcoin mining – Kosovo, Iran and a few others,” he noted.
“The third factor is active traders. I think there’s a conscious effort to push Bitcoin and the rest of the market down for two things: taxes and to buy in again for a much lower price.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.