Bitcoin has dipped below the $50,000 level for the first time in April as a market-wide sell-off continues.
Having breached the $49,400 support level, BTC is likely to go as low as $46,000, one analyst points out.
Bitcoin has breached the $50,000 support level. The top cryptocurrency has been bleeding for the better part of this week, after hitting its all-time high mid-last week. While many have been expecting it to rebound and resume its upward momentum, it seems set for even more price drops in the coming days.
Altcoins haven’t fared any better. Ether is down 11.5 percent, while BNB and XRP are down 15 percent and 21.5 percent respectively. Dogecoin has continued to slide further down and has lost 28 percent in the past 24 hours. VeChain, THETA, TRON, EOS, IOTA, Bitcoin SV and Maker are all down by more than 20 percent.
The price drop liquidated $3.7 billion in crypto positions, data from Bybt shows.
Bitcoin is trading at $48,980 at press time. In the past 24 hours, it has lost 10.4 percent of its value, The crypto has now lost 24.5 percent of its value since it hit its all-time high at $64,941. This is the seventh day in the past nine days that Bitcoin has shed its value. Moreover, this is the highest weekly price drop for the past two months.
In more bad news for the flagship crypto, its dominance dropped below 50 percent for the first time since 2018. It has since then regained some of its dominance as altcoins bleed harder. It now stands at 51.6 percent.
Bitcoin has dropped about 24% from its ATH, even with all the adoption, powerhouse names supporting it, big money backing it up, infrastructure in place for it, its “cap,” and the top brand name recognition.
Hopefully it recovers. It’s been resilient thus far!
— Shibetoshi Nakamoto (@BillyM2k) April 23, 2021
The drop comes after analysts sounded a warning about Bitcoin dropping below the 50-day moving average. JPMorgan analysts, in particular, stated that if Bitcoin bulls didn’t step in to reverse the dip, the crypto risked seeing more losses. In addition, the Turkey Bitcoin payments ban and Biden’s reported incoming tax changes have impacted the market. Even fictitious news such as U.S Treasury’s enforcement on crypto money launderers – which was proven to be pure FUD – has also impacted the market.
Vijay Ayyar, an executive at Luno exchange captured what’s happening in the market, telling CNBC, “The market has run up quite a bit overall, and it’s probably cooling off before the next leg up. There has also been a wider stock market dip, which might be affecting all risk-on assets.”
Short-term pain, but long-term gain
Bitcoin has defied the odds in the past and reversed a dip in minutes. However, according to market analysts, the current dip is likely to continue in the short term. Pankaj Balani, the CEO of Delta Exchange told Busines Insider:
BTC has slipped below the 50-day moving average support that it held sacrosanct through this rally, and looks like there is more downside here.
Matt Maley, the chief market strategist at Miller Tabak + Co concurs. He pointed out that in the short term, many traders are likely to sell to take some profits. Some may also be selling for tax purposes, but it’s not a market dump.
One of the biggest things you have to worry about is that the things with the biggest gains are going to be most susceptible to selling. It doesn’t mean people will dump wholesale, dump 100% of their positions, but you have some people who have huge money in this and, therefore, a big jump in the capital gains tax, they’ll be leaving a lot of money on the table.
In the long term, Bitcoin will regain its bullish momentum. Ryan Conway, the SVP at digital banking platform Oxygen observed, “Although there are several external factors that could lead to short-term swings this week, I am bullish on bitcoin long term as it has proven to demonstrate real utility as a store of value with the potential to replace gold or even major fiat currencies as a hedge against inflation.”
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