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Bitcoin remains a dog with fleas as other risk assets rebound

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Bitcoin, the underperforming asset continues to slide on renewed selling pressure.  No major news is specifically being attributed to today’s slide, but the strong break of the psychological $4,000 mark dashed many crypto fans hopes of a bounce at that level.  While other risk assets and global markets rallied on optimism on developments in Europe, virtual currencies remain under pressure.  European indexes finished broadly stronger, oil had a relief rally, while both the euro and cable rallied early against the dollar, only to give up gains at the European close.

All cryptocurrencies had a disastrous last week, with bitcoin now down almost 82% from the $19,996 high made last year.  Last week, Chainanalyis noted that 17 Bitcoin retail processors payments fell 80% from the beginning of the year till September.  Earlier in the month, Bitcoin Cash developers and miners could not agree on change of software, also known as a hard fork.  The result was the decision to split into two digital currencies, Bitcoin ABC and Bitcoin SV.

The regulatory environment globally has also been another key hurdle, with landscape becoming stricter as government agencies continue to monitor digital currencies.

The Bitcoin weekly chart highlights the recent plummet with price trading around the $3,540 level, which is the 1.414% Fibonacci expansion level of the last major rally we saw early this year.  If bearishness accelerates and breaks below the $3,000 level, key support could come from the $2,350 level.  To the upside, $5,000 will remain critical resistance.

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
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