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Bitcoin Investors in For a bout of Déjà vu

  • On Monday’s trading session in the U.S., bitcoin fell by 3% to as low as US$45,715 at one point before recovering.
  • And while some would suggest that cryptocurrencies finished 2021 on a sour note, with the benchmark bitcoin losing 20% in December alone, the digital asset class has had a stellar year by far.

For many traders, January has all the hallmarks of the 2018 cryptocurrency winter, when institutional adoption in the form of CME Group and CBoE’s bitcoin futures were intended to usher in a fresh cadre of investors into the nascent asset class and chase it to new highs.

These highs did eventually come, albeit not on the timeline that most cryptocurrency traders in 2018 would have hoped for.

On Monday’s trading session in the U.S., bitcoin fell by 3% to as low as US$45,715 at one point before recovering, below its 200-day moving average of around US$47,900 and the seventh consecutive close below that threshold, a key level for chart watchers.

To be sure, bitcoin has been here before and depending on which timeline you are following, this could either be the start of another enduring cryptocurrency winter, or just typical volatility before another strong rally.

Clues however lie in indicators such as bitcoin’s Relative Strength Index or RSI, which is in oversold territory.

Using the 200-day moving average the same way as it is used for stocks, bitcoin’s ability to keep its head above US$46,000 sets it in good stead to see a breakout to over US$65,000.

And while some would suggest that cryptocurrencies finished 2021 on a sour note, with the benchmark bitcoin losing 20% in December alone, the digital asset class has had a stellar year by far.

The Bloomberg Galaxy Crypto Index, which tracks some of the largest cryptocurrencies lost 22.5% in December as well, but some are attributing the losses to portfolio window dressing as the year draws to a close.

And just as quickly as prices can drop, they can also bounce back even harder, with the volatility and gyrations par for the course and if nothing else, the dip is an opportunity to double down on positions.

 

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SuperCryptoNews is a global leading blockchain and crypto news provider, covering daily news on the latest tech and trading developments in crypto. We bring you expansive crypto news coverage especially in Asia, with a focus on Singapore, Thailand and Southeast Asia.

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© Copyright of Novum Global Consultancy Pte Ltd {2020, 2021}. All rights reserved.

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