Bitcoin has already gone through a tough start to the year and things are going to be worse before they start improving.
While the cryptocurrency eluded the unprecedented selling pressure that overwhelmed the markets last week, it is still down more than 35% year-to-date.
Bitcoin got the attention of Wall Street and Main Street as it surged to an all-time high close to $20,000 in the middle of December. Investor anxieties about a frothy market, cryptocurrency hacks, and the possibility of a regulatory crackdown in some Asian countries have pulled the entire market for digital coins to half of its worth at the height of its powers.
Now, conditions may be forming for a sell-off towards $4,605, according to analysts over at JPMorgan. That figure would be a nearly 50% decline from its current price of $8,467.97 a coin, according to the latest figure from CoinMarketCap.
“The question is whether we go there straight away, indicated on a failure to clear 10128 and 10776, or at a later stage after a stronger countertrend rally,” technical analysts at the bank wrote in a note sent to clients and was published in Business Insider UK.
Bitcoin’s revival from a low above $5,900 earlier this month was “impressive,” according to the bank.
However, JPMorgan still perceives a “fairly high risk” of a sell-off to the $4,605 level if the cryptocurrency doesn’t break through its resistance level between $10,128 and $10,776.
“Above 10776 though, the door for a broader countertrend rally to 14334 if not to 16304 (76.4% on different scales) would be wide open,” the bank shared.
Bitcoin hasn’t traded above $16,000 since early January 2018, according to CoinMarketCap data.
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