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Bitcoin’s 50% Rout Ruined Old Supports

Bitcoin's depreciation has forced it through practically every technical support level. Traders predict the next sandbag will be $30,000.

Bitcoin’s 50% Rout Ruined Old Supports iBase Trading.
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Bitcoin’s depreciation has forced it through practically every technical support level. Traders predict the next sandbag will be $30,000.

The world’s most valuable digital asset has fallen for the sixth day in a row, with the token losing about 20% in the last seven days. It is already down 50% from its November all-time high and was selling at $32,970 on Monday, its lowest level since July.

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According to its Relative Strength Index (RSI) score of 19, the coin’s selloff has brought it to the most oversold level since March of 2020. BTC is currently reaching the $30,000 support level, where some experts think it may find a short-term floor. If the RSI rises above 70, an asset is labelled as overbought, and if it drops below 30, it is viewed as oversold.

“A 50% drop is not as dramatic as what we have seen in prior years. However, it’s considerable now, so it is more of an issue,” said Simon Peters, eToro’s market analyst. “The true support level appears to be about $30,000, which we measured in May following China’s Bitcoin mining ban.”

The Back Up

According to Wilfred Daye, CEO of Securitize Capital, the company’s asset management division, $30,000 is psychologically meaningful. Bitcoin could get some backing there. “Miners who bought in at the start of the bullish trend will be in danger,” he warns if the selloff continues to $27,000.

In recent days, crypto has seen significant selling pressure. Traders have been claiming the Federal Reserve’s hawkish indications as a rationale to liquidate riskier assets. These assets include high-valued technology stocks.

Bitcoin is Volatile

Considering the unpredictability of cryptocurrency, traders frequently use technical research. Remember that traders considered $40,000 to be a significant point of support only about two weeks earlier. Bitcoin is currently trading at a 15% discount to that level. Additionally, other digital currencies are falling in value. Ether is now trading at $2,240, down from a high point of roughly $4,860 in November.

“A dovish Fed raised cryptocurrency market valuations across the board, pricing in a significant progress rate. As a result, the Fed’s tightening strategy is draining liquidity from the system. It is also resetting unrealistic values that weren’t keeping up with genuine usage,” BlockTower fund manager Avi Felman explained.

The 40-day correlation coefficient between Bitcoin and the tech-heavy Nasdaq 100 index has risen to about 0.66. This is the highest it has gotten since Bloomberg began collecting data in 2010.

“The views and opinions on this Crypto News Website are solely those of the authors and contributors. These views and opinions do not necessarily represent those of iBaseTrading or its partners.”

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Tanya Smith is an editor at iBaseTrading. With M.A. in Journalism and Mass Communication, she is pursuing her dream of creating a positive difference in the media industry. She also enjoys Fashion and Travelling.