Bitcoin drops, Wall Street Bleeds!
Bitcoin price established a firm foundation near the $43,000 and $44,000 area by the beginning of the week after dropping quickly from its new all-time high of $58,000 last week. The world’s biggest cryptocurrency had infiltrated the bottom boundary of a rising price channel amidst the decline, showing signs of weakness as February’s bullish momentum stopped.
Early this week, after a consolidation phase in a falling wedge pattern, Bitcoin price penetrated the upper boundary successfully, sparking a frantic rally that reached $52,500 as of yesterday. This morning, the world’s leading cryptocurrency had lost its grip of the $50,000 price level during a wider liquidation in both equities and the cryptocurrency market.
The cryptocurrency has shed over 7% of its price in the past 24 hours and now it is trading at a market price of $46,613. Notwithstanding the dip, Glassnodes indicate that long-term Bitcoin holders were stockpiling despite the sell-off. So far, the daily price range is from $46,300 to $48,376.20.
After rallying to $52,500 yesterday, Bitcoin price retraced back to below $50,000, moving lower than the bottom boundary of an ascending parallel channel. The $52,500 price level represents the Golden Fibb retracement level of the decline from $58,000 all-time high price and last week’s low of $43,000. Now Bitcoin price appears to be trading in a bearish market in the short term.
Furthermore, Bitcoin’s correlation to the S&P 500 reached a 5-month high for this month. Bitcoin had been correlated to the traditional financial markets over the past several months and it was evident just a few weeks ago when Bitcoin price trailed stocks on a close range. The last time Bitcoin and stocks followed each other this closely was back in November in 2020.
Now, US Federal Reserve Chairman Jerome Powell delivered an uninspiring speech that resulted in both S&P 500 and NASDAQ, Bitcoin price then declined sharply and it is still dropping at the time of writing.
Powell’s comments come along with the raft of mixed predictions by popular analysts on the future of Bitcoin. Bloomberg’s Mike McGlone used historical data to predict that the Bitcoin price is going towards $100,000 on March 4. McGlone pointed out the rising discount for shares in Grayscale’s Bitcoin Trust. The discount applied to when the price of Grayscale shares traded at a lower price than the underlying crypto asset, and it is now at the level during the March 2020 crypto market crash.
MasterChangz, a Crypto Twitter analyst, tweeted that the Bitcoin price will hit $200K before June 2021. He said that the next rally will be towards $77,000 in two weeks’ time.
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