Throughout the past 24 hours, the price of Bitcoin (BTC) dropped from $4,065 to $3,600, reversing a short-term corrective rally.
The dominant cryptocurrency has been on a steep downtrend for several weeks but on November 26, for a brief of time, Bitcoin seemed to be initiating a corrective rally after reaching a new yearly low at around $3,400.
Temporarily, Bitcoin spiked to $4,000, engaging in a 17 percent increase in price within a 24-hour period. However, the price of the asset began to fell back to the lower region of $3,000.
What is Bitcoin up to?
The cryptocurrency market is struggling to sustain any sort of momentum in an attempt to create a trend reversal. Sell pressure on major digital assets is increasing and buy pressure is declining, which has led both Bitcoin and Ethereum to drop by more than 40 percent in the past two weeks.
“Bitcoin failing to complete the bull flag and to hold the neckline of the IH&S. Lack of buy pressure and $3,800 range looking weak. Expecting more downside: $3,400 as the first target,” cryptocurrency trader Crypto Rand said on November 26.
Since Monday, the price of BTC has moved closer to the $3,400 support level and based on the movement of BTC in the past 12 hours, it is likely that BTC will drop below the level in the days to come, especially if it fails to maintain stability above the $4,000 mark.
Ripple (XRP), EOS, Stellar (XLM), and other major cryptocurrencies are in a worse position than BTC and ETH because of their low daily volumes. Currently, the volume of ETH remains larger than that of XRP, XLM, and BCH combined.
When the price of an asset falls substantially without a huge spike in volume, it represents a free fall without much sell pressure. This means as big sell volumes begin to hit the market, the price of the asset could be vulnerable to additional sell-offs in the near future.
The volume of BTC is decent at $6.5 billion and the volume of ETH is also relatively high. But, the volume of other major cryptocurrencies is lower than where they were from August to November, a period in which BTC demonstrated its lowest level of volatility in recent history.
Alex Krüger, a cryptocurrency trader and economist, said:
“Before the crash, BTC had been growing exponentially. Will BTC ever resume exponential growth? Maybe not. Maybe only temporarily. Many assets don’t grow exponentially. What if bitcoin has matured and starts behaving as a currency or most commodities?”
One Positive: Swiss ETP
The newly introduced crypto exchange-traded product (ETP) in Switzerland offered by Amun and the Swiss Stock Exchange, has begun to appeal to a large group of traders in the region.
It has become the biggest ETP in Switzerland with the highest trading volume, portraying an immense interest from local investors towards crypto.
Featured Image from Shutterstock. Charts from TradingView.
Last modified: March 4, 2021 3:12 PM