Institutional tax-loss harvesting weighs on the Bitcoin price as 2021 comes to a close

2021 was a record year for the cryptocurrency market, despite the year-end woes that kept Bitcoins price below $48,000. This has disappointed many who had called for a $100,000 moonshot for Bitcoin.

Cointelegraph Markets Pro and TradingView data show that the last 24 hours have been an emotional rollercoaster for the top cryptocurrency. After a short dip below $46,000 on Dec. 30, the price of Bitcoin quickly recovered to reach $47,500 at midday.

BTC/USDT 4-hour chart. TradingView

Here are some market analysts views on the year-end Bitcoin price action and what to expect for 2022 as blockchain technology and other cryptocurrencies continue to be adopted.

Major resistance turns to support

Market analyst and pseudonymous Twitter User Rekt Kapital discussed the analysis of Bitcoin price movement on the monthly chart. He posted the following chart, which highlights how BTC has turned a major resistance area into support.

BTC/USD 1-week chart. Source: Twitter

Rekt Capital claims that “BTC has transformed the February, August and September resistance into new supports this month”. They are looking for a monthly candle to close above the green area in the chart to confirm this new support level.

Rekt Capital will be watching the $48,500 level to gauge the strength of BTC in the coming days. According to the analyst:

“If BTC can reclaim $48500 support by the end the week, then BTC could once more revisit $52000 resistance.”

BTC faces $52,000 as its biggest short-term obstacle

David Lifchitz (managing partner, chief investment officer at ExoAlpha), offered insight into the year-end decline in Bitcoins price. He pointed out institutional investors that appear to be “selling to tax reasons with T+3 settlement…to settle on 12/31.”

Lifchitz believes that the volatility in the last week is due in large part to the markets weak liquidity. Lifchitz suggested that it would not be surprising for Bitcoin to rebound to $50,000 within the next few days, as well as to drop to $46,000.

Lifchitz suggested that bears could break below $46,000 support and complete the large head-shoulder pattern on the BTC charts. However, he stated that $30,000 is the next stop.

Lifchitz referred to upside levels at $52,000 as the “main hurdle that BTC has failed twice.”

“Should resistance be overthrown, the next upside stops will be the $60,000 region and then $70,000 ATH.”

Lifchitz offered a final warning about the Mt. The CIO believes that the Gox distribution of 146,000 BTC in the first half 2022 will be a significant event.

Related: Mt. Related: Mt.

There is no need to panic

Crypto trader and pseudonymous user on Twitter, Devchart posted some reassuring words to traders worried by BTCs recent drop below $46,000. The following chart shows that Bitcoin traded within a defined range most of December.

BTC/USDT 4-hour chart. Source: Twitter

Devchart explained:

Zoom out, and youll see that we are back at the bottom of the range on which we have been oscillating since December 3rd. There is no need to panic, as we will soon be leaving this range.

Michael van de Poppe (market analyst, Cointelegraph contributor) offered a similar outlook. He posted the following tweet in which he suggested that the market could experience some short-term weakness before eventually heading higher.

These are some pretty boring markets. Its just a matter of #Bitcoin reaching its bottom. We are retesting $46K support, bounced. However, we may need to lower the liquidity below the lows before we can make any upwards runs.
— Michael van de Poppe (@CryptoMichNL) December 30, 2021

The total cryptocurrency market is now worth $2.237 trillion. Bitcoins dominance rate at 40.4% is also noteworthy.

com. You should do your research before making any investment or trading decision.

https://cointelegraph.com/news/institutional-tax-loss-harvesting-weighs-on-the-bitcoin-price-as-2021-comes-to-a-close