On Nov. 18, the price of Bitcoin (BTC), fell to new lows, and the brief stay at $56,000 resulted in a sharp selloff in Ether and other altcoins.
Cointelegraph Markets Pro and TradingView data show that support at $60,000 was broken early in the United States trading session. This allowed bears to temporarily take control of the market.
BTC/USDT 4-hour chart. TradingView
Here are the views of analysts on today’s price action. Also, traders should be aware that there could be further downside.
Major drawdowns will “be relatively brief-lived”
A recent report by Delphi Digital suggests that the initial sell-off was driven primarily by liquidations, rather than a fundamental shift of narrative. This suggests that traders may be able to take advantage of this pullback to gain market exposure.
BTC/USD technical outlook for the short-term. Source: Delphi Digital
Delphi Digital pointed out that although there was a lot of market deleveraging over the last week, it didn’t stop the overall increase in “aggregate liquidity across major exchanges coinciding each sizable price drop.”
Delphi Digital believes that BTC could fall to $55,000 if selling pressure continues to force BTC below $57.750, but analysts suggest that any drawdown would be short-lived.
Delphi Digital said:
“If BTC falls another leg, it could make it even more appealing for those with long-term conviction who are looking to accumulate.”
Similar sentiments were expressed by the firm regarding Ether’s price action, which fell to $4,000 on Nov. 18. Delphi Digital pointed out that Ether was trying to turn a long-term resistance line established in May into support. This suggests that ETH “will look primed for trend continuation towards the upside”
Major support and resistance levels to Ether. Source: Delphi Digital
Delphi Digital said:
“If price support is broken, bulls will be able to bounce off the trend line that runs from the May 2021 high to the Sep. 20,21 high, and possibly retest it.”
Rest easy for long-term holders
Options trader John Wick, a pseudonymous Twitter analyst, provided further analysis of Bitcoin’s prices. He posted the following tweet in which he highlighted the fact that even experts traders are concerned about Nov. 18’s price action.
#BTC We are trying to keep that support zone that I have had up. NGL I’m not too happy to see that red bar Does not mean we fail the support 100%, but it is telling us the probabilities are starting to stack against it holding If you’re long term this shouldnt bother you pic.twitter.com/D4EvI8RcnD
— John Wick (@ZeroHedge_) November 18, 2021
Wick stated that the price drop seriously challenged the support zone’s lower limit, and “probabilities were starting to stack against its holding”. Wick also pointed out that this is only an issue for traders in the short-term and not something long-term hodlers should be concerned about.
Related: Bitcoin drops to a one-month low following a 6% plunge in the price of Bitcoin to $56.6K
Ether still holds a bullish structure in the market
The following chart, which is a market analyst and pseudonymous Twitter User “Pentoshi”, shows Ether’s break below its ascending channel. It also shows the retest of the support/resistance levels found at its prior all-time highs.
ETH/USD 1-day chart. Source: Twitter
Although some market traders may have taken this as a bad sign, Pentoshi views it as a positive turn of events because “it is one of the things in market that still has bullish market structure.”
Pentoshi did however offer some words of caution:
“What you don’t want to see it do is go back under those ath’s on a closing basis.”
The total cryptocurrency market capitalization is now at $2.508 trillion. Bitcoin’s dominance rate of 43.4%.
You should research all aspects of trading and investment before making any decisions.