Analyst says Bitcoin is ‘on sale’ after BTC price dips below $54,000

Bitcoins (BTC), downtrend extended a few steps lower on Dec. 3, after the price fell below $54,000. Traders will also notice that the BTC/USD daily charts shows a significant uptick in the volume of sells.

Crypto Fear & Greed Index. Source: Alternative

Investors are concerned by the new COVID-19 variants emergence and the Federal Reserves hawkish comments. Charlie Munger, a veteran investment icon, added fuel to the flames by comparing price action in crypto markets to the end of the dot-com boom.

BTC/USDT 4-hour chart. TradingView

Here are some thoughts from analysts about the market, and what you should be watching as 2021 draws to a close.

Support for $52,000 to $53,000 Stronger

Decentrader, a crypto market intelligence company, highlighted the “listless” nature Bitcoins price movement over the past weeks. They pointed out the price volatility on shorter timeframes and evidence of a slowdowntrend on longer timeframes as reasons traders are more afraid that the bull run might be over.

Analysts suggested that BTC would break out of its current range once it does so. They believe the most obvious support cluster is located around $52,000-53,000, near the point at which the price crashed during the May crash.

Decentrader stated,

“Should there be a deeper correction, then a strong support zone lies around the 200DMA at $46,200 or at the lower support level at $44,300.” A significant resistance level is located at the $60,000 round number.

These levels are where Bitcoin and Ether can be purchased.

Many have been disappointed by Bitcoins recent price action. However, David Lifchitz (managing partner, chief investment officer at ExoAlpha) suggested that Bitcoin and Ether were “on-sale”, when they reached $54,000 and $3,000. This was for those who could afford them.

Lifchitz stated that the Mt. He said that the Gox liquidation saga continues to affect Bitcoins price and suggested that BTC investors should “remain cautious in anticipation of the expected distribution sometime in Q1 2021.”

Lifchitz also mentioned the impact of the Omicron COVID-19 variant as something to be aware of as “a bad epidemic leading to lockdowns will definitely initially weigh on this market.”

Lifchitz suggested this could lead to another round government stimulus. “This would increase global debt, weaken currencies against currency and gold, and at the same time, the funny money could also be exchanged for immutable ones like Bitcoin.”

Lifchitz said,

Cryptos could benefit from a panic-induced dip if they refer to the past, even though this is highly speculative. In the next few weeks, well find out if Santa will be here this year or if COVID will keep him locked down.

Related: US infrastructure law could brace digital assets — but first, some fixes

It is beginning to look like September 2021 all again

Analyst and pseudonymous Twitter User Rekt capital provided insight into the current price action in comparison to a pullback that occurred earlier in the year. He posted the following chart, which shows the most recent drawdown as well as the decline in BTC price that took place in September 2021.

BTC/USD 1-day chart. Source: Twitter

Rekt Capital said,

“In September, BTC recovered -25%. BTC investors became Extremely Fearful at this point. BTC then reversed direction and found new ATHs. BTC is now down by -23% The Fear & Greed Index is likely to show Extreme Fear soon. Similar retracement depth. Similar investor sentiment.”

The total cryptocurrency market is now worth $2.531 trillion, and Bitcoin is the dominant currency at 41%.

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