Bitcoin is holding on to its recent drop, putting it on track for its worst monthly decline since May’s cryptocurrency rout.
After a nearly 7% drop in value from the previous day, the volatile token was trading at $48,000 by 1:40 p.m. on Wednesday in Singapore. According to CoinGecko, the cryptocurrency market has lost about $260 billion in value during the month.
As 2021 draws to a close demand for speculative investments is decreasing. This may be due to the Federal Reserve pulling back from the extraordinary stimulus that helped lift many assets this year.
According to Ben Emons (global macro strategist at Medley Global Advisors LLC), there is talk of a “leveraged unwind in Bitcoin longs going through year-end.” He said that this could “disaster risk sentiment for a very short period.”
To find clues about Bitcoin’s future, strategists keep an eye on key technical levels.
Fairlead Strategies’ founder and managing partner Katie Stockton said that Bitcoin’s next level is $44,200. This was based on a Fibonacci trace.
The token’s wobble in this month has lowered its year-to-date climb to around 65%, still better than traditional assets such as global equities or commodities.
The Bitcoin bull market will return, according to crypto converts. They expect the digital asset to reach a record high of nearly $69,000 last month. One of their arguments is the controversial notion that the token acts as a hedge against inflation.
Graham Jenkin, chief executive of cryptocurrency exchange CoinList, stated that “the arc of history was long.” “Over time, Bitcoin will be a much superior asset to invest.”
This could be because of a drop in trading volumes during the Christmas holiday period, which could lead to price movements.
Mati Greenspan (founder of Quantum Economics), said, “I’m going out on a limb though, and classify this holiday-season funk as low-volume holiday season funk.” She was referring to the recent performance.
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