Bitcoin falls below $35,000 to key technical levels that analysts say could make or break the next move higher
Bitcoinprice hovered around $35,000 and technical analysts said this point was a pivotal one on the daily charts.
- A break above this level could push Bitcoin back towards all-time highs around $41,000, while a marked drop below could trigger a fall towards key support at $30,000, they said.
- Although the longer-term outlook for both
cryptocurrenciesremains skewed to the topside, further losses look likely in the coming days," DailyFX strategist Daniel Moss said in a note.
Bitcoin fell on Wednesday, heading for its largest weekly fall since late August, as a combination of a stronger dollar and a bout of profit-taking swept $172 billion in value from the cryptocurrency market since the start of the week, leaving the price at a pivotal point on the charts.
"The cryptocurrency market has come under fire in recent days, with Bitcoin and Ethereum both sinking lower as a wave of risk aversion sweeps across global financial
Bitcoin was last trading around $34,580, up around 1.65% on the day on the Coinbase exchange.With the retreat to $35,000, the Bitcoin price is hovering around key technical levels on the charts, and a break above, or below, those levels could pave the way for the next burst towards record highs, or a more protracted decline, analysts said. "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), Moss said.
Bitcoin is still a full 95% above where it was a month ago, but the technical charts show that this latest retracement in price this week has brought a number of support levels - a level at which the price should hold in the event of a more aggressive sell-off - into play.
The Bitcoin price is nearing a key Fibonacci retracement level. Fibonacci retracements are a series of horizontal lines on a chart that show where support and resistance are likely to emerge based on an asset price's recent highs and lows and a breach of a key line can often trigger a swift move higher, or lower.Read more: A former journalist who worked his way up to become one of Wall Street's best tiny-company stock pickers tells us the 4 pillars of the approach that's beating 98% of his competitors
Chris Svorcik, a technical analyst who writes for FXEmpire, said Bitcoin needed to stay above $29,762, which is the half-way point between the low of December 11 and the high on January 12, or 50% retracement, to avoid a drop towards $26,000.
"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. Only a break below the deep Fibonacci levels would change and invalidate that view," he said.Ethereum, which on Wednesday was trading up 2.8% on the day around $1,079 on the Kraken exchange, also finds itself at a tipping point on the technical charts. The price rattled to a three-year high at $1,350 late on Sunday, but its decline since then means it has now surrendered over half of the gains made since the start of 2021, leaving it hovering at a key Fibonacci retracement level.
"Support from the broader market would be needed, however, for Ethereum to break back through to $1,100 levels," he said, adding: "In the event of an extended crypto rally, Ethereum could test resistance at $1,250 before any pullback. The second major resistance level sits at $1,212."Read more: GOLDMAN SACHS: Buy these 50 under-owned stocks that will roar higher as growth and inflation lift off in 2021
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