The price of Bitcoin has not been immune from asset selling (assuming bitcoin is an asset much like a stock or bond). In fact the selling is more intense from end of year levels and highs for the year.
The price of Bitcoin is down some 37% from the March high (which was testing the 200 day MA at the time) and around 35% from the end of year level as well.
Technically in addition to selling off from the 200 day moving at the March high, the price has moved back below its 100 day moving average at $40,811.41 currently (blue line in the chart above), and its 50% retracement of the move up from the March 2020 low at $36,425 (the low for that year).
Yesterday and continuing today, the price decline moved down to test a key swing area between $28,600 and $30,066 (see red numbered circles and yellow area in the chart above). The 61.8% retracement of the same move higher from the March 2020 low is also within that area at $28,737.30. The low price yesterday reached $30,082. The low price today extended to $29,731.
The current price is trading at $31,252 as support buyers lean against the upper area of that swing range.
Going forward holding that swing area gives the HODL (Hold On for Dear Life) investors "some" comfort in what is a painful move. Move below, however, and additional comfort from that support starts to fade.
Of course bitcoin has loyal followers/investors. Most speak in terms of the long-term levels much higher than the highest high near $69,000 ($100,000, $200,000, name your price, etc).
With that investor mindset - that does not include any concern of the him risk - it's hard to shake the tree out of all the buyers, or stop the dip buyers who have FOMO (Fear Of Missing Out). There may also be some investors who are still in from much lower levels. The March 2020 low was down at $3850. So although the price is working toward the 61.8% of the move up from that level, with that retracement at at $28717, it is still around $25000 above that 2020 low level. Nevertheless, versus a $69000 high in November 2021, it is a meaningful haircut. The question for HODL traders is when does the haircut start to hurt....
The move lower in Bitcoin is being influenced by UST, a controversial stablecoin , as the organization that supports it is sitting on billions of dollars in bitcoin and may be forced to unload of those Bitcoin.
The story is a complicated one which unfortunately is what the digital world of storytelling bases their hopes on.
When things get complicated, the traders that DO focus on risk will tend to use the technicals to help fill in the missing pieces. The holding below the 200 day MA was a bearish development at the March high. The 100 day MA is another technical bearish signal.
The lower swing area is another technical level that will either hold support or be broken. Dip buyers can lean against the area and hope the "story" from UST gets better and pushes BTC higher in the process. Those same dip buyers can turn to sellers on the break (with limited risk). All is regardless of how the "story is written".
To read about the UST stablecoin "story", CLICK HERE.
