Bitcoin slides below $50,000 capping a down December

Bitcoin slid below $50,000, a level some analysts view as key for assessing the largest cryptocurrency’s outlook heading into 2022.

The token fell as much as 4.5% on Tuesday and was trading at about $49,300 as of 8:40 a.m. in New York. Ether, the second-largest coin, and the Bloomberg Galaxy Crypto Index were also in the red, with each falling more than 3%. Smaller tokens such as Solana, Cardano, Polkadot and meme token Dogecoin also lost some ground Tuesday, according to tracker CoinGecko.

Investors have retreated from the most speculative corners of global markets of late, worried that an ebbing tide of central bank stimulus could spell trouble. Just how exposed Bitcoin and the wider crypto universe is to that risk is the subject of heated debate.

For Bitcoin, overall there isn’t “anything worrying at this point,” said Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno in Singapore. The digital coin’s prospects remain “bullish” if the $48,000 to $49,000 level holds, he added.

Bitcoin has largely moved in tandem with riskier assets like U.S. stocks this year, though that pattern looks to be breaking down this month. The S&P 500 index of the largest companies is up about 5% so far in December, while Bitcoin has lost more than 10%. This is the first month since June that their performances have diverged.

Technical studies suggest something of a tipping point for Bitcoin following a retreat from an all-time high of almost $69,000 in November, which has trimmed its year-to-date advance to roughly 70%.

For instance, a study using Bollinger bands — a popular way of looking at volatility — shows the virtual coin touched the upper band in the past week but failed to close above it. For some, that suggests Bitcoin may face difficulty making gains in the short term.

Katie Stockton, founder and managing partner of Fairlead Strategies, an independent research firm focused on technical analysis, says Bitcoin’s next level of support is around $44,200, based on a Fibonacci retracement level. 

The $50,000 level isn’t as important in her view “but it does hold psychological significance,” she said. “Bitcoin is in a consolidation phase, and seems to be reacting to the short-term overbought condition.”

The post Bitcoin slides below $50,000 capping a down December appeared first on InvestmentNews.

Andrew is half-human, half-gamer. He’s also a science fiction author writing for BleeBot.

Andrew Vincent
Andrew is half-human, half-gamer. He's also a science fiction author writing for BleeBot.
%d bloggers like this: