After wild rallies that put its price more than five times above 2018 levels, experts are warning that it may be past time for a Bitcoin correction.
Today we have a little more specific guidance from Pankaj Balani, the CEO of digital asset derivatives exchange Delta Exchange, who is quoted in a story by William Suberg at Cointelegraph as noting that if Bitcoin sinks below support levels at $50,000, it may go as low as $40,000, essentially cutting its short-term values by up to one third.
That’s a big dip, and Balani suggests it might sink other cryptocurrencies, too.
“Cryptocurrencies in general, (Balani added), ‘should move lower’ under such a scenario,” Suberg writes.
For reference, the crypto world is ablaze right now, with higher than usual values for Ethereum, Dogecoin and Cardano, as all three of these coins have to date generated massive returns in just a short timeframe.
As for Bitcoin, analysts seem to think the fate of the coin’s short-term value rests on whether larger investors or “whales” will support Bitcoin above 50,000 or not. Experts look at metrics like exchange order book support to try to read the tea leaves.
Meanwhile, it’s worth pointing out that even after a move to $40,000, Bitcoin would still tower above what it was worth last Christmas.
“#Crypto prices plummet to levels not seen since last week!!!,” tweets Lark “The Crypto Lark” Davis, also quoted in Suberg’s piece.
However, it’s worth thinking about whether a major correction or dip will occur, and whether to buy back in if Bitcoin strikes below 50K. Steven Msoh at Crypto News Flash provides some context for the current thinking on potential bearish action:
“The drop comes after analysts sounded a warning about Bitcoin dropping below the 50-day moving average,” Msoh writes. “JPMorgan analysts, in particular, stated that if Bitcoin bulls didn’t step in to reverse the dip, the crypto risked seeing more losses. In addition, the Turkey Bitcoin payments ban and Biden’s reported incoming tax changes have impacted the market. Even fictitious news such as U.S Treasury’s enforcement on crypto money launderers – which was proven to be pure FUD – has also impacted the market.”
BTC traders – keep your wits about you.