(BLOOMBERG)— Round numbers tend to be a fixation for Bitcoin chart-watchers, with many keeping their eyes peeled on $20,000 amid the latest swoon. But veterans know to be on the lookout for a more noteworthy one: $19,511.
That’s the high the coin hit during its last bull cycle in 2017, which it reached at the end of that year. Throughout its roughly 12-year trading history, Bitcoin has never dropped below previous cycle peaks, according to Vetle Lunde and Jaran Mellerud at Arcane Research, so a break below it would be momentous.
“A potential visit below this level could lead to a lot of hodlers capitulating and a wind-down of leverage, making this a very important support level to pay attention to onwards,” the pair wrote in a note, referencing long-term, staunch holders.
In addition, besides the psychological importance of the level, most of the open interest in Bitcoin options is based on the $20,000 strike price, according to Arcane, “which can contribute to selling pressure in the spot market should the price fall below.”
Cryptocurrencies have tumbled this year, with prices of some digital assets falling as much as 90% as the Federal Reserve raises interest rates to combat rampant inflation. Tokens have suffered a bad stretch this week in particular as the market prices in even more aggressiveness from the central bank. Bitcoin is down roughly 30% since Friday, one of its worst six-day stretches on record. It hasn’t seen a single up day over the last nine sessions.
The coin’s drop this year has brought it to around $20,700 Wednesday, its lowest point since December 2020, meaning no one who bought over the past year and a half has made a profit. Many analysts are now watching indicators to see who else might come …read more
Source:: Time – Technology