A brief visit to the $56,000 mark occurred on November 18, following which the price of Bitcoin (BTC) plunged to new lows, causing an immediate drop in the price of Ether (ETH) and other cryptocurrencies.
In the early hours of the United States trading session, data from Cointelegraph Markets Pro and TradingView showed that support near $60,000 was surpassed, allowing bears to briefly regain control of the market.
See what analysts have to say about today’s price action and whether or not traders should be concerned about further declines in the near future.
Significant reductions “shall be quite brief in duration”
“The initial sell-off was largely driven by a wave of liquidations rather than a fundamental shift in narrative,” according to a recent report from cryptocurrency research firm Delphi Digital, raising the possibility that this pullback will be short-lived and that it could “present an attractive entry point” for traders looking to gain more market exposure in the near future.
Delphi Digital noted that while there had been a significant amount of deleveraging seen across the market over the past week, this had not prevented an overall increase in “aggregate liquidations across major exchanges coinciding with each sizable price dip,” as had been the case in the previous week.
What’s next for Bitcoin? Delphi Digital predicts that the cryptocurrency may go as low as $55,000 “if prolonged selling pressure pulls BTC below $57,750,” but the experts also believe that “any drawdown will be rather brief in duration.”
According to Delphi Digital:
“If BTC takes another leg lower it could set up an even more attractive entry for those with long-term conviction looking to accumulate.”
A similar attitude was stated by the corporation in regards to the price movement of Ether, which temporarily went below $4,000 earlier in the day on November 18. As Delphi Digital said, Ether is currently trying to reverse its way out of a long-term resistance level created back in May. If it can do so, the cryptocurrency will “appear prepared for trend continuation to the upside,” according to the firm.
Delphi Digital said:
“If price support gives way, the hope for bulls would shift to a possible retest and bounce off the upper trend line established from the May 2021 top to the Sep. 2021 high.”
Long-term holders can rest easy
Options trader and pseudonymous Twitter analyst “John Wick” provided additional insight into the Bitcoin price on Nov. 18. He tweeted the following tweet underlining the fact that even experienced traders are becoming concerned about the price activity on the day in question.
#BTC
We are really trying hard to hold that support zone I’ve had up. NGL I’m not too happy to see that red bar
Does not mean we fail the support 100%, but it is telling us the probabilities are starting to stack against it holding
If you’re long term this shouldnt bother you pic.twitter.com/D4EvI8RcnD
— John Wick (@ZeroHedge_) November 18, 2021
According to Wick, the recent dip in price has seriously challenged the lower bound of the current support zone, as “the odds are starting to stack against it holding.” However, long-term investors should not be overly concerned by this type of price action, as it is only an issue for short-term traders.
Ether is still in a positive market structure, despite recent volatility
In the case of Ether, market analyst and pseudonymous Twitter user “Pentoshi” shared the following chart, which highlights the break below the previous ascending channel and the retest of the support and resistance levels seen at the cryptocurrency’s prior all-time highs.
The move has been interpreted negatively by some traders in the market; nevertheless, Pentoshi sees the move as a good development because it “is one of the things in the market that is still characterized by bullish market structure.”
Pentoshi, on the other hand, issued a few words of warning, stating that:
“What you don’t want to see is it going back under those ath’s on a closing basis.”
The total market capitalization of cryptocurrencies is now $2.508 trillion, with Bitcoin holding a 43.4 percent share of the total market capitalization.
The author’s thoughts and opinions are entirely his or her own and do not necessarily reflect those of CoinNewsDaily. Each investing and trading action entails risk; before making a decision, you should conduct your own research.
