Tanya Abrosimova
Independent Analyst
- Bitcoin's sell-off is typical for the Chinese New Year celebrations period.
- BTC/USD needs to regain $8,450 to mitigate immediate bearish pressure.
Bitcoin (BTC) has lost nearly 6% of its value during recent seven days and hit the low of $8,217 on Friday. At the time of writing, BTC/USD is changing hands at $8,330 with the short-term recovery capped by SMA50 1-hour at $8,370. Bitcoin's market share has settled at 66.2% after a short-loved dip below 66.00%.
Bitcoin's network statistics
The share of Bitcoin addresses "in the money" recovered from 63% registered on Thursday to 70% at the time of writing, according to the statistics provided by Intotheblock. Notably, the volatility has been moving down together with the price with some lag. Thus, the 30-day volatility topped at 39.2% on January 20 and slipped to 38.79 by press time.
Chinese New Year effect
Several cryptocurrency analysts believe that the recent Bitcoin's sell-off is related to the Chinese New Year. Thus, Alex Kruger published statistical data of Bitcoin's price movements during this period, which confirms that the first digital coin tends to slide down ahead of celebrations.
Some think the Chinese New Year may impact $BTC negatively, as people sell bitcoin to purchase presents. Chinese New Year starts with the 2nd new moon after the winter solstice. This year it falls on Jan/25.
The expert concluded that the sell-off was not unusual and the recovery wouldn't be long in coming.
BT/USD: technical picture
From the long-term point of view, We will need to see a sustainable move above $8,450 for the upside to gain traction. This pivotal resistance is created by 50% Fibo retracement for the upside move from December 2018 low to July 2019 high. Once it is out of the way, the recovery may be extended to the next important barrier $8,650 followed by SMA100 daily on approach to $9,000.
On the downside, strong support is created by $8,000. This zone is reinforced by SMA100 daily, and it has the potential to slow down the bears. The next important barrier is created by the broken downside trend line at $7,800.
BTC/USD daily chart
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
VanEck sees Bitcoin reaching $61 trillion market cap, Marathon buys $100 million BTC
Bitcoin declined by 1% on Thursday following asset manager VanEck's forecast that the top digital asset will reach a $61 trillion market capitalization by 2050.
Ethereum Classic price sets for a rally following retest of key support
ETC edges higher by 2.3% and trades around $22.60 at the time of writing on Friday after testing a key support area the day before. On-chain data showing increased account growth suggests a bullish move ahead. Ethereum Classic price faced rejection by the daily resistance level of $25.13 earlier this week.
Celebrity meme coins lose their shine
Celebrity meme coins report by Jupiter Slorg on Thursday shows that these tokens have been in deep waters since early July after experiencing heavy growth in June. In a recent analysis, Jupiter Slorg revealed that celebrity meme coins are down by an average of 94% from their all-time highs.
Ripple gains 5%, Mark Cuban says Kamala Harris’ nomination could affect SEC lawsuit
Ripple (XRP) made a comeback above key psychological resistance early on Wednesday. Crypto traders are optimistic after the Ethereum Exchange Traded Fund (ETF) launch. Entrepreneur and investor Mark Cuban recently shared his comments on how Kamala Harris’ nomination to the Presidential elections could influence crypto regulation.
Bitcoin: Will BTC manage to recover from recent market turmoil?
Bitcoin recovers to $67,000 on Friday after finding support around $63,500 a day before. Still, BTC losses over 1.50% on the week as Mt. Gox persists in transferring Bitcoin to exchanges.