Bitcoin Bounces Back Before Hitting 2017 Peak, Is The Bottom In?
16 Junio 2022 - 12:00PM
NEWSBTC
The price of bitcoin had dropped dangerously close to the 2017
cycle peak on Wednesday. It was a brutal decline for investors who
watched their BTC portfolios incur losses after losses.
Speculations were rampant in the space on what a touch below
$20,000 would have meant for the market. The implications were
abundant in their impact but the recovery back above $21,000 has
staved off the bears, if only for a little while. Is The Bitcoin
Bottom In? After the market recovery on Wednesday, it has become
apparent that there has been some intervention in the market crash.
With bitcoin in the $20,000 level, many had resigned to the fate
that there would be no respite until the 2017 high levels were
broken. If this had happened, it would have marked a
first-of-its-kind event in the history of bitcoin where the digital
asset had always managed to never trade below previous cycle
peaks. Related Reading | Bitcoin Crash Sends
Institutional Investors Running For The Hills As such, significant
support forming right above $20,000 has restored some hope in the
market that this would be the bottom. So far, this theory has
managed to hold as bitcoin has turned back into the green for the
first time since the crash began. More importantly, though is the
fact that the recovery has not been significant by any measure. The
digital asset still remains well below its 20-day moving average, a
sign that bears can easily take hold once more. BTC decline
triggers fear of hitting previous cycle peak | Source: BTCUSD on
TradingView.com However, bitcoin is said to be at oversold levels.
So, the market expects to see fatigue in the sell-offs that have
been rocking the digital asset. A slowdown would definitely be good
for bitcoin but it would need to see more recovery to ensure this.
Implications Of Falling Below $20,000 The $20,000 level is
important for bitcoin to hold for a number of reasons. One of the
most major of these are the MicroStrategy bitcoin-backed loans. The
way these loans are structured leave open a margin call opportunity
if BTC to fall below its previous peak cycle. And although CEO
Michael Saylor has assured the market that the firm has more
collateral to put towards its loan to avoid a margin call disaster,
it remains a very real possibility. Related Reading
| Double-Digits Losses Are The Order Of The Day As Bitcoin
Declines To $20,000 Another implication is the Celsius liquidity
levels. Now, the first is said to have paid off some of its loans
which had pushed its liquidation price back to $14,000 but a break
below $20,000 shows no significant support and would quickly see
the lending protocol liquidated. Last but not least is the fact
that bitcoin at $20,000 represents an important technical and
psychological level. Given that the majority of BTC-denominated
open interest are all at the $20,000 level, a break below this
would see renewed sell-offs from investors. The only major
support after this level is at $16,000, after which, it falls to
$14,000, the Celsius liquidation price. However, if bitcoin is able
to recover above $25,000 by the end of the week, a test of the
$29,000 resistance point would quickly follow. Featured image from
Listverse, chart from TradingView.com Follow Best Owie on Twitter
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