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Bitcoin has been sinking along with riskier assets in recent months.
Bitcoin stayed just above US$20 000 on Wednesday, with its inability to gain upward traction fuelling concern among analysts of further declines.
The largest cryptocurrency was little changed, bound in a range between about US$20 130 and US$20 429.
The MVIS CryptoCompare Digital Assets 100 index, which measures 100 of the top tokens, fell 2,1 percent as of 1:30pm in Singapore.
“Most short-term technicals point to an above-average chance of a final ‘washout’-style decline before this bottoms,” said Mark Newton, technical strategist at Fundstrat, in a note on Tuesday.
“The initial warning should occur on a daily close under US$20 491, while under US$19 744 allows for a pullback to retest US$17 592.
Technically not much lies under US$17 592 before US$12 500 to US$13 000, which I expect should be an excellent place for intermediate-term buyers to add to longs.”
Bitcoin has been sinking along with riskier assets in recent months, so a slide on a day of tech-stock declines is par for the course.
Crypto markets have also been bludgeoned by the meltdown of the Terra/Luna ecosystem, trouble at hedge fund Three Arrows Capital and frozen withdrawals at places like Celsius, as well as job-cut announcements from the likes of Crypto.com, Coinbase and BlockFi.
The crypto industry must be relieved that prices have steadied out “given the stream of negative headlines over the last couple of months,” said Craig Erlam, senior market analyst at Oanda.
“I fear more may follow in the weeks ahead and I wonder whether the community does too, given its inability to get any traction above US$20 000.”
Still, any further dips might create a good chance to buy, Fundstrat said.
“Look to buy dips within two to three weeks at lower levels,” Newton said, “and any move down to test or briefly undercut June lows presents an opportunity.” — Bloomberg.
Online Reporter