The price of bitcoin has fallen from a new all-time high near $42,000 to $34,500 and is currently trading at a key technical level that could define whether its uptrend has reached a top, or whether there’s more upside for BTC.
According to analysts Business Insider spoke to, the price of BTC is close to Fibonacci retracement levels, which are horizontal lines that indicate where support and resistance are likely to occur. Each level is associated with a percentage based on how much of a prior move the price has retraced.
Daniel Moss, a strategist at DailyFX, wrote that the cryptocurrency market has been under fire over the last few days, with “Bitcoin and Ethereum both sinking lower as a wave of risk aversion sweeps across global financial markets.” Moss added that over the long-term, both cryptocurrencies could still go upwards, although further losses “look likely in the coming days.”
Commenting on BTC’s price performance, Moss was quoted as saying
Failing to gain a firm foothold above last week’s close ($38,200) would probably open the door for sellers to drive prices back towards psychological support at $30,000. Clearing that may pave the way for a push back towards former resistance-turned-support at the 2017 high ($19,891).
While the bitcoin price is still around 95% above where it was a month ago and Is still far from its high of near $20,000 seen in December 2017, technical charts show its latest retracement has brought a number of support levels into focus.
Chris Svorcik, a technical analyst who writes for FXEmpire, was quoted as saying BTC needs to stay above $29,762 – the half-way point between its December 11 low and its January 12 high – to avoid a drop toward the $26,000 mark.
As long as price stays above the 50-61.8% Fibonacci support zone, an uptrend has the best chance of continuing higher (blue arrow) for new high.
Ethereum, which has recently come close to its all-time high near $1,400 after trading at $1,350, has seen its price drop towards the $1,000 area and is also hovering at a key Fibonacci retracement level.
Bob Mason, another technical analyst who writes for FXEmpire, whore Ethereum would “need to move through the 23.6% FIB and the pivot level at $1,069 to support a run at the first major resistance level at $1,131.
Mason added that Ethereum would, however, need “support from the broader market” to break through the $1,100 level, with an “extended crypto rally” being able to help it test the $1,250 mark before enduring a pullback.
Featured image via Pixabay.