Sharp decline in Bitcoin drags the cryptocurrency market

The market has been waiting for weeks, with different forecasts. “Bitcoin and Big Tech received punishment as investors reallocated some of their most profitable risk bets,” Edward Moya, a senior market analyst at Oanda, writes in a client note. “The cryptocurrency space is seeing a major repositioning and that is leading to some unwanted selling pressure, but the medium and long-term outlook remains strong, “he added.

“Bitcoin continues to trade in range after another chaotic week for the markets,” says Craig Erlam, an analyst at Oanda. “On the one hand, the trend is very against it, but it is seeing strong support around $ 47,000,” he explains, “so this price will hardly be lowered.” And the expert believes that “cryptocurrencies are clearly entrenched and are reluctant to let another stellar year end on a negative note.” “Many they expected to reach six figures by the end of the year“, he exposes, alluding to the predictions that bitcoin would reach 100,000 before the end of 2021.” Now you can cross your fingers and wait for half (50,000), “he says.

The worst fears of the operators of the market of the cryptocurrencies They were not confirmed this Wednesday, despite the fact that the monetary policy decision of the US Federal Reserve complied exactly with what was expected by analysts. Jerome Powell made the decision to double the “tapering” and foresees rate hikes in 2022. All because the risk that inflation will be more “persistent” in the future is now a fact of reality. But Bitcoin, Ethereum and most altcoins showed a slight rebound that, although modest, proved right to those who claimed that cryptocurrencies had already discounted the possible movement with their previous falls.

With Bitcoin 33% below its November all-time highs, the queen of digital currencies is not out of the woods just yet, as bears are showing their grip in the near term. But the behavior of the crypto market seems to agree with those who had warned that we have witnessed a movement “sell the rumor, buy the news”, with rises this Wednesday above US $ 49,000. All in all, the close below $ 47,000 sends a red flag, as this price level has become a true waterline for bitcoin, which it must maintain if it has the slightest intention of starring. a Christmas rally.

The downward bias that has maintained the most traded of digital tokens persists, said Craig Erlam, an analyst at Onada, “as it is struggling to generate momentum above $ 50,000.” “At the beginning of this week it fell below $ 47,000, but quickly recovered again,” he says, adding: “I guess we’ll see if Bitcoin can expect a Christmas rally soon.”

As for Ethereum, it remains today at a price level that acted as support previously and is now a formidable resistance. Although the second currency in market capitalization left highs this Wednesday above this level and insists on its attempts to overcome it. The technical outlook for ether – the native unit of the Ethereum network – suggests that the price is encapsulated in a range that goes between this resistance and $ 3,660, in round numbers, with a December 4 low at the gates of u $ s3,500, a barrier that IG Markets analysts advise to hold to avoid further falls.

As for the rest of altcoins, they maintain the positive path this Thursday after the rebound carried out by the majority of tokens after the Fed. Solana and Avalanche leave notable increases, while Dogecoin returns to the decline after rising more than 15% last day, thanks to the statements of the CEO of Tesla, Elon Musk, that he will accept the cryptomeme as a means of payment. Total capitalization is back above $ 2.2 trillion.

However, other concerns hover over the market. On the one hand, there is the repeated refusal of the US Securities and Exchange Commission (SEC) to approve an exchange-traded fund (ETF) based on physical bitcoin. Specifically, the US markets regulator’s reasons for rejecting the VanEck fund in November caught some investors by surprise, citing an inability to avoid manipulation of the crypto market due to unregulated trading platforms and large volume of trading based on the ‘stablecoin’ of Tether (USDT).

On the other hand, the recent falls coincide with the market’s more global fears about the developments of the pandemic, especially after the appearance of the Omicron variant of Covid. Finally, as mentioned by ‘CoinTelegraph’, the bears that pile up in the derivatives market have control of 755 million dollars of options in bitcoin, which expire this Friday, as long as the price remains below $ 48,000 .

But other technical signals and the behavior of the whales, which appear to be actively buying and entering the market at these prices, give hope that another bull run may be seen before the end of the year, as analyst Michaël van de Poppe on his Twitter account.

The analyst published: “fear recedes little by little since nothing important has transpired from the Fed meeting.” In very short-term terms, Bitcoin has support around the corner at last week’s lows ($ 47,215) and resistance at last week’s highs ($ 52,195). “And all of the above within a clear long-term upward trend in the background, which has not been threatened in the least. However, unlike other market moments, no more or less clear potential pattern is observed”, concludes José María Rodríguez, technical analyst at Bolsamanía.

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Sharp decline in Bitcoin drags the cryptocurrency market

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