Bitcoin below $25,000! Should you buy the dip or more pain on cards?

Synopsis

Bitcoin faced yet another significant correction, falling sharply below $25,000, the lowest in over a year and a half, said WazirX Trade Desk months.Bitcoin has been moving in tandem with the riskier asset class, alike equities. If the crypto markets can move away from being correlated to the traditional markets, it would be a highly optimistic signal, said experts.

The largest and oldest crypto-asset dwindled about 12 per cent in the 24 hours to barely hold $24,000 levels. The total market cap of Bitcoin slumped to $450 billion in Monday’s afternoon trade.

The total traded volume Bitcoin zoomed about 60 per cent as BTC tokens worth about $55 billions exchanged hands in the last 24 hours, suggested data from Coinmarketcap.

Experts said that this unwarranted fall in the Bitcoin prices had taken it closer to its next support levels of $24,000 and it appears to be in the oversold zone currently.
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Bitcoin faced yet another significant correction, falling sharply below $25,000, the lowest in over a year and a half, said WazirX Trade Desk months.

Interestingly, the Dollar Index is also at a six-month high, gaining 2 per cent.
“In the daily time-frame, the Bitcoin trend has broken below the long-formed triangle pattern. Immediate and key support is expected at $24,000,” it added. “The RSI dropped below 30 as Bitcoin entered the oversold zone.”

The crypto market witnessed a severe sell-off over the weekend after the US reported disappointing and red-hot inflation numbers, and traders are expecting an aggressive stance from the Federal Reserve in its meeting scheduled later this week.

Bitcoin has been moving in tandem with the riskier asset class, alike equities. If the crypto markets can move away from being correlated to the traditional markets, it would be a highly optimistic signal, said experts.

Darshan Bathija, CEO and Co-Founder, Vauld, said that the crypto Fear and Greed Index still showed a sentiment of ‘extreme fear’, indicating that most investors were still extremely bearish.

“While long-term investors will likely view this as an opportunity to buy the dip, retail investors may remain risk-averse in the current market,” he suggested.

Bitcoin is a decentralized cryptocurrency originally described in a 2008 whitepaper by a person, or group of people, using the alias Satoshi Nakamoto. It was launched soon after, in January 2009.

From its all-time peak of about $68,000, Bitcoin is down about 65 per cent. Market experts see the correction continue if more negative news floods in.

Reading the technicals, Manoj Dalmia, Founder and Director, Proassetz Exchange, said that the downtrend confirmed in January 2022 after giving a downward breakout below the Head & Shoulder pattern is still continuous.

“Last week, it managed to give a breakout below its support zone,” he added. “Currently, the trend is downward and a major support of $22,000 is now active,” he added.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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Updated: 06/13/2022 — 10:00