Has Bitcoin Been Building Up Strong Support Near $53,000?
Since reaching a fresh, all-time high of nearly $69,000 earlier this month, bitcoin prices have experienced multiple sell-offs, repeatedly pushing lower.
The world’s most prominent digital currency reached its latest zenith on November 10, before approaching $62,000 two days later, CoinDesk data reveals.
After that retracement, bitcoin mounted a recovery, climbing above $66,300 on November 15, additional CoinDesk figures show.
Following this upward movement, the digital asset fell back once again, dropping below $56,000 on November 18, before rising above $60,000 on November 21.
Since that time, bitcoin prices have repeatedly approached $55,000, reaching a six-week low yesterday.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Following these continued declines, several market experts weighed in on a key support level that might interest technical traders.
“The cost basis of short-term BTC investors has historically served as a bull market support band,” noted Alyse Killeen, founder and managing partner of venture capital firm Stillmark.
“Blockware Market Intelligence reports that this metric, on-chain VWAP (volume-weighted average price), is currently around $53K,” she stated recently.
“Approximately $53K is also the BTC price at a 1 trillion-dollar bitcoin market cap, which may have psychological significance for investors and traders,” Killeen added.
Pankaj Balani, cofounder & CEO of Delta Exchange, responded to these claims.
“Yes. I agree with this assessment. 1 Tn MCAP as a strong support is also something that I highlighted in my previous note,” he stated.
“We feel that the market will stay rangebound in the short term. BTC has failed above 60K a few times and it will take some doing to break above that level, at the same time 53-54K, which is also 1TN market cap, will act as a strong support,” Balani predicted.
Jake Wujastyk, chief market analyst of TrendSpider, offered a slightly different take.
“I agree that anytime the dollar cost average price is tested, it can be an area for the price to bounce simply because the average participant is back to breakeven, drying up supply on the market,” he stated.
However, Wujastyk was more skeptical about the claim that the $1 trillion market cap provides notable support.
“I do not think the market cap of Bitcoin provides any psychological significance for investors and traders as price levels are what is generally thought of as psychological levels important to market participants rather than the market cap.”
Petr Kozyakov, co-founder and CEO of the global payment network Mercuryo, also offered his perspective on the matter.
“Despite the sustained sell-offs that we have seen in the price of Bitcoin, the premier digital currency has not traded below the 30-day low of $55,632, showcasing the legitimacy of the VWAP metric which places the Bitcoin price support around $53,000,” he noted.
“Thus far, buyers have been able to cushion the market from the selling pressure, and this has largely shown how mature the market has grown in the past year.”
Further, Kozyakov provided a bullish outlook.
“Short-term holders should be seen as vital to help maintain a healthy market, and as long as the premier coin continues to hold the forte above the psychological mark at $53,000, the imminent runup to the previous ATH at $68,789 will be just a matter of time.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.Source