Bitcoin prices have plummeted in recent months, losing more than half their value since mid-April and falling to just under $30,000 this morning.
According to CoinDesk numbers, the world’s most common digital currency reached $30,201.96 today.
According to additional CoinDesk data, it was down more than 55 percent from its all-time high of nearly $65,000 at this point.
At the time of writing, the cryptocurrency was trading around $37,000, and many market analysts weighed in, shedding light on the digital asset’s recent price fluctuations and evaluating its short-term prospects.
[Editor’s note: Investing in cryptocoins or tokens is extremely risky, and the market is largely unregulated.] Anyone thinking about it should be aware that they might lose their entire investment.]
Selling Pressure That Is ‘Relentless’
“Over the last 24 hours, the selling pressure in the BTC market has been relentless, perfectly aligning with elevated bitcoin inflows to exchanges seen on-chain,” said Sean Rooney, head of research at Valkyrie Investments.
“Binance led the charge on Monday, with over 53,000 BTC dumped into the exchange to be sold,” he explained.
Nick Mancini, a research analyst at Trade The Chain, a crypto sentiment data provider, discussed how events like these influenced prices.
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“Bitcoin is now down 45 percent from its April high of nearly $65,000,” he said.
“Short-term sentiment seemed to be bottoming out with price, but it appears that they were only consolidating for a further decline,” Mancini said.
“The good news is that Bitcoin’s primary liquidity levels in the $30,000 range remained stable throughout the decline, causing the price to recover from $30,000 to near $37,000 in less than an hour.”
“Key support levels are $28,500, $24,000, and $20,000, which all correspond to order book liquidity levels,” Mancini said.
StockCharts.com’s chief market strategist, David Keller, added:
“Bitcoin’s drop to $30,000 made technical sense because it’s a 100 percent retracement back to the January lows. It’s all about seeking equilibrium after a serious selloff like this.”
“Where do we see investors with enough clout to drive the price back up?”
“Based on previous price support and the influx of buyers this morning, $30,000 is the new floor for Bitcoin,” Keller said.
Market Is ‘Oversold’
The market may have overreacted in light of recent events and bitcoin’s losses since roughly mid-April, according to analysts.
According to Mancini, Bitcoin’s relative strength index (RSI), a technical measure used to gauge an asset’s momentum, recently dropped to “the lowest level since March 2020,” meaning the digital currency is “highly oversold.”
He also stated that the Moving Average Convergence Divergence (MACD), a momentum indicator used by technical analysts, is “at its lowest level in Bitcoin’s history, further suggesting Bitcoin is oversold.”
“The market is due for a bounce,” according to Rooney, but “a fast turnaround in the short term is unlikely.”
“A correction of this magnitude in the middle of a bull market seems out of place, but the absence of mania topping trends indicates the bull run is not over,” he said.
“With new users joining the network, long-term fundamentals on-chain remain strong.”
