Is Bitcoin melting or has it hit a floor price?

Bitcoin ricocheted off $ 42,000 twice today. (Photo by Yuriko Nakao / Getty Images)

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Bitcoin prices have suffered lately, falling to nearly $ 42,000 today, hitting their lowest level in more than three months.

The world’s largest digital currency by market cap fell to just $ 42,102.35 this afternoon, according to CoinDesk data.

At this point, the cryptocurrency was at its lowest level since February 8, as additional CoinDesk numbers show.

These recent declines fit in with a trend of ongoing weakness as Bitcoin has lost more than 30% since it hit an all-time high of nearly $ 65,000 in mid-April.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

“Bitcoin is melting”

Yesterday, Michael Kramer, founder of Mott Capital Management, LLC, wrote in a blog post: “Bitcoin is melting.”

At the time he wrote the piece, cryptocurrency was trading near $ 44,000, and Kramer noted that the digital currency “may have to keep falling.”

Several analysts spoke out on the recent declines in the digital currency as well as where the innovative asset could be headed next.

“Bitcoin is not completely melting, but we are seeing the first large-scale correction since the bull run began in early 2020,” said Nick Mancini, research analyst at crypto sentiment data provider Trade The Chain.

“Bitcoin is now 35 percent from its all-time high of $ 64,900 in April, and it appears to be a combination of a weakening sentiment caused by the CPI numbers and Elon’s negative tweets behind the recent decline,” he said .

“We are currently seeing an almost 1: 1 correlation between sentiment and price development,” Mancini cited data compiled by Trade The Chain.

“Sentiment is currently bottoming out, so we are waiting for price movements to bottom out.”

Jason Lau, COO of Cryptocurrency Exchange OKCoin, also spoke about how investor mindsets play a key role in the markets.

“Bitcoin is down ~ 34% since it hit an all-time high 34 days ago. This latest move reflects a change in sentiment – as many have started looking into other crypto opportunities outside of BTC and spreading disinformation along the way. ”

Bitcoin has entered sell mode.

The “Bitcoin chart is now in sell mode,” said Julius de Kempenaer, senior technical analyst at StockCharts.com.

“Over the weekend, BTC fell below the recently formed support level at $ 47,000. Breaking below this level has triggered a new series of lower highs and lower lows, which means the chart is now on a confirmed downtrend in the daily timeframe, ”he said.

“The next level of interim support is between $ 42,000 and $ 43,000, which has been tested today and is bouncing off so far.”

Katie Stockton, the founder and managing partner of Fairlead Strategies, LLC, also weighed and described the $ 42,000 level as “key support.”

“There are no signs of depletion on the downside as Bitcoin is testing this level. This is more likely in two weeks as my overbought / oversold indicators are currently in place.”

Pankaj Balani, Co-Founder and CEO of Delta Exchange, provided perspective and spoke to key levels of support.

“Despite a sharp correction and trading BTC prices in the support zone of $ 42,000 to $ 44,000, we don’t think Bitcoin has yet found a floor,” he said.

“In contrast to the previous slumps in Bitcoin – in the last 9 months – we are not finding any buyers this time looking for a sharp decline. Most traders are confident of further downward movement and see BTC levels at 35000-38000. “

Sean Rooney, head of research at Valkyrie Investments, also spoke about possible drawbacks and cited information he had gleaned from the blockchain analysis.

“Traders and short-term investors should take into account that, from a chain analysis perspective, large Bitcoin deposits have flowed into the exchanges. This could be a signal that the selling pressure for the current downtrend has not eased and that lower prices are indeed possible. “

Bullish Outlook

Despite the recent problems with the digital currency, several market watchers were optimistic about its future prospects.

“Despite the negative sentiment, the fundamentals look strong as both Bitcoin’s hash rate and active addresses have recently hit all-time highs,” Lau said.

“Bitcoin’s upcoming taproot upgrade also seems to be on the right track. Almost 80% of miners are signaling support.”

William Noble, chief technical analyst at cryptocurrency data provider Token Metrics, also spoke on the topic, focusing on recent market history.

“I think when it comes to charts you have to think about seasonality,” he noted.

“Last year the fire was severe between late May and August. We expect history to repeat itself, ”said Noble.

“Anyone who sells now will regret it later. The phrase not to sell the dip has never been more appropriate, ”he emphasized.

“Crypto is for the people. When the DeFi room wakes up, people will laugh at those who panicked selling in mid-May. ”

Disclosure: I own Bitcoin, Bitcoin Cash, Litecoin, Ether, and EOS.