Bitcoin price fell to its lowest level since October 6th yesterday and hit a multi-week low as well.
BTC price 4-hour chart | Source: Tradingview
According to Tradingview data, the price of the world’s largest digital currency by market cap had temporarily dropped to just $ 53,359.
After falling to its lowest level in more than 7 weeks, the price bounced back above $ 57,000 at the end of the day and is now trading at $ 57,379.
Main support test seller
Recently, Bitcoin price has repeatedly moved towards the $ 53,000 threshold – a level some analysts have identified as important support.
Although the price tried to recover strongly from there, it all failed. Several technical analysts commented on the implications of this move.
Joe DiPasquale, CEO of crypto hedge fund manager BitBull Capital, said:
“As of Friday, Bitcoin tested the support at around $ 53,000. With each decline below that, the price bounced higher, indicating strong support. The correction to near $ 53,000 on November 28th also pushed the price back up.
This signals a strong purchasing power there. If a level of support keeps coming into play, it is evidence of demand and a bullish signal. “
Dylan LeClair, head of market research at Bitcoin Magazine, also commented on the current situation.
“$ 53,000 is a critical figure that represents the average cost base of short term owners in the chain market. Throughout Bitcoin’s history, the real price (cost basis on the chain) has served as the primary pillar of the bull market by short-term holders.
Konstantin Anissimov, CEO of CEX.IO, also speaks about this importance. However, it offers a different perspective.
“We see three factors that make $ 53,000 a strong support. Bitcoin’s market cap is $ 1 trillion with a price tag of $ 52,950. This level is an important support / resistance through 2021 and is currently being retested as a support. “
Source: Konstantin Anissimov
He also mentioned other developments that could attract market watchers’ attention.
“The recent selling pressures have been mainly driven by liquidation with sell / surrender signals from long-term investors in the market. This shows that the ~ 23% decline from the all-time high isn’t a major turnaround. On 11/10 (the ATH date) has liquidated $ 968 million. “
Liquidated dollar value (daily and total) as of 11/10 | Source: Konstantin Anissimov
Finally, Anissimov talks about market sentiment. He refers to the “BTC Fear and Greed Index”, the value of which was 27 at the time of the analysis. It has since risen to 33, which suggests fear at the time of writing.
“BTC was swaying in the zone of extreme fear. This usually happens after weak holders exit the market. “
Bitcoin Fear and Greed Index | The source: alternativ.me
Other important factors
In addition to highlighting key support near the $ 53,000 mark, LeClair outlined several key factors that market watchers should watch in the future.
Turning to the derivatives market, he noted that “while the long side has not fully exploded, perpetual swap funding rates are still moderately high and nothing too serious or worrying. Feel free to hesitate”.
Bitcoin traders are currently watching the macro backdrop and the possibility of a delay by the Federal Reserve limiting the pace of balance sheet expansion. In addition, the rise in the US dollar against other currencies by the dollar currency index (DXY) in 2021 is also significant and should be monitored. “
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According to Forbes