Bitcoin
Bitcoin’s Drop Below $58,000 Could Mark a Larger Correction, Analyst Says
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Bitcoin fell below $58,000 on Thursday, hitting its lowest level since May.
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The decline takes bitcoin below its 200-day moving average, which could signal a downside, said Alex Kuptsikevich of FXPro.
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Investors are dumping the token as fears of selling pressure from Mt. Gox mount.
Bitcoin hit a two-month low on Thursday as the world’s largest cryptocurrency fell to $58,000 for the first time since May.
The apex token dropped 3.5% over the day, reaching a low of $56,882. The drop extends a three-day slump as concerns grow over looming selling pressure in the market.
The decline has now pulled bitcoin below its 200-day moving average, FXPro senior market analyst Alex Kuptsikevich noted.
This metric is used to determine where a market is headed — consistent trading below the indicator usually suggests a decline.
“From the current position, a 12% drop to $51.5K (February consolidation area) is more likely than the same amount of growth to $65.8K,” he wrote Thursday morning. The higher forecast is based on bitcoin’s 50-day moving average.
Just three days into the month, bitcoin has already suffered an 8.6% decline. Driving the selloff is looming concern over payments from Mt. Gox, a cryptocurrency exchange that was declared bankruptcy almost a decade ago.
The planned payments are to reimburse customers who were victims of a 2014 hack, and will be distributed in bitcoin or bitcoin cash. But that is raising fears of selling pressure as customers may choose to cash out their tokens for big gains.
According to K33 ResearchConcern has weighed on the price of bitcoin in recent days.
Other crypto tokens such as ether and solana, are tracking bitcoin lower. In fact, the industry’s market cap fell to a February low on Thursday, falling below $2.17 trillion, Kuptsikevich wrote.
However, bullish analysts remain confident about bitcoin’s comeback this year.
On Monday, Fundstrat’s Tom Lee projected that the cryptocurrency will rise to $150,000 by the end of the year as Mt. Gox Overhang Passes.
Others, like Galaxy CEO Michael Novogratz, warned months earlier that a bitcoin correction would happen before it could continue climbing higher. Speaking in February, he suggested a $50,000 floor.
Still, bitcoin is up more than 38% year-to-date, after a mass bullfight sent the token to a record high of $73,798. What sparked the rally was the launch of spot bitcoin ETFs in January.
Read the original article at Business Insider