Bitcoin dropped to 7%, slipping below $40,000 after a three-month high. The coin is now trading at $37,914, Bloomberg Quint reported.
According to the news outlet, Bitcoin retreated below its 100-day moving average and is expected to dip even more to reach its 50-day moving average, i.e. $34,773.
While some analysts say that the sudden retreat of Bitcoin is just a regular pullback, some others warn people to stay alert.
“This rally has been so quick that you have to be a little bit careful of how quickly it’s accelerated over the last few weeks,” JJ Kinahan, chief market strategist at TD Ameritrade told Bloomberg Quint in an interview.
Another strategist Matt Maley, chief market strategist for Miller Tabak + Co told Bloomberg Quint, “If it does indeed bounce back, it’s going to be quite bullish. If, however, it sees much more downside follow-through, things are going to get scary pretty quickly.”
According to Frank Cappelleri, a desk strategist at Instinet, Bitcoin’s volatile nature outsized percentage moves often form an identifiable pattern.
“Whenever the next up leg commences, a similar chain of events may have to happen again,” he told Bloomberg Quint. “And while the recent breakout attempt through $40,000 didn’t encourage upside follow-through, the consolidation since May has created a potential bottoming formation. That scenario will remain a possibility if Bitcoin can etch out a higher low versus its July low point.”
Since 2020, cryptocurrencies have been forming new patterns and toughing new highs, until this week when the momentum finally dissipated.
