Bitcoin is currently trading at $34,620 following a 6.75% correction from a local high of $37,750 over the past 24-hours.
The world’s largest cryptocurrency is now on the brink of breaking a diagonal trendline dating back to early December, although it’s worth noting that there have been wicks below this region despite no candle closes.
Anything between a four-hour or daily candle close below this trendline, which is currently at $35,230, would indicate a period of continuation to the downside.
However, there are still a number of key levels of horizontal support to the downside, notably $34,400 and $30,000. Both of these regions will likely provide Bitcoin with short term relief.
The recent plunge in price has been attributed to uncertainty around Tether’s situation with the NYAG, with a one-month extension being requested over their submission of documents.
On the contrary, from a technical perspective the reason for the correction seems to be more closely related to a lack of bullish momentum to the upside, with a clear lower high being formed as well as a bearish cross on the weekly stochastics.
It’s important to remember that even in 2017, when Bitcoin surged from less than $2,000 to $20,000, it often suffered corrections of more than 30% as those taking profits wiped out liquidity to the buyside.
Bitcoin can slump to as low as $27,000 and still remain bullish on higher time frames, while the likes of Ethereum and Litecoin will most likely mimic Bitcoin’s trajectory.
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In August 2008, the domain name bitcoin.org was registered. On 31st October 2008, a paper was published called “Bitcoin: A Peer-to-Peer Electronic Cash System”. This was authored by Satoshi Nakamoto, the inventor of Bitcoin. To date, no one knows who this person, or people, are.
The paper outlined a method of using a P2P network for electronic transactions without “relying on trust”. On January 3 2009, the Bitcoin network came into existence. Nakamoto mined block number “0” (or the “genesis block”), which had a reward of 50 Bitcoins.
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As with any investment, it pays to do some homework before you part with your money. The prices of cryptocurrencies are volatile and go up and down quickly. This page is not recommending a particular currency or whether you should invest or not.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice.