Volatility is the new currency market lingo. The Nov. 11th evening sell-off of Bitcoin (BTC), is a reminder of how sharp whipsaws can be used to reach underlying support levels.
Cointelegraph Markets Pro and TradingView data show that Bitcoin prices dropped to $62,800 on Nov. 10th, but have since recovered to $65,000 where bulls are now looking to consolidate and regroup to push higher.
Chart for BTC/USDT 4 hours TradingView
This is a look at what analysts have to say about Bitcoin and the cryptocurrency markets as rising inflation concerns dominate news headlines in the U.S.
Bitcoin dips are “transitory”
Although the sudden $7,000 drop in Bitcoin may shock some, analyst and pseudonymous Twitter User ‘Nunya’ believes that the recent price action is normal and temporary based on Bitcoin’s past performance.
Breaking News Alert: Bitcoin dips are temporary! pic.twitter.com/DdpL8ggHRo
— Nunya Bizniz (@Pladizow) November 11, 2021
The chart below shows the Bitcoin price and its 20-day moving Average (20-MA). It’s not uncommon for a rise in Bitcoin prices to be followed by a pullback. This happens before the price rebounds back up.
BTC/USDT 1-day chart. Source: TradingView
Market effects of inflation and evergrande
Jean-Marc Bonnefous (head of asset management at Tellurian ExoAlpha), provided insight into the macro factors involved. He highlighted the fact that there has been much discussion about the effect of the Evergrande Story on the recent market sell-off.
Bonnefos said that Evergrande news was to equities what Elon Musk tweets to cryptos to make this development more relatable. It is “somewhat manipulated news to move markets.”
Bonnefos says that the crypto markets are overreacting to headlines and that the recent dip is likely more of a technical consolidation following the sharp rally in the last few days.
It’s not just the negative headlines about Evergrande or tweets by influencers that have an impact on the price action in crypto markets. Bonnefos claims that the 6.2% increase in the U.S. Consumer Price Index, (CPI), is a significant factor that influences the global financial markets as well as the Bitcoin price.
“The shocking U.S. inflation numbers should be a positive fundamental driver for Bitcoin prices beyond any short-term tactical selling pressure.”
Related: Why Bitcoin lost $6K in an hour was good news for BTC price action
Bitcoin is currently undergoing a necessary retest
Analyst Twitter user “GalaxyBTC” posted the following chart, which shows a possible path for BTC to reach $75,000 in short-term.
Chart for BTC/USDT 6 hours Source: Twitter
According to the analyst,
“Yesterday’s test was necessary to continue the bull race in a healthy way. We will pump harder now, I believe.”
The total cryptocurrency market is now worth $2.847 trillion, and Bitcoin’s dominance rate at 43.1%.
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