The price of bitcoin has been tumbling in recent days, prompting some technical analysts to make extremely bearish forecasts on the once-hot digital currency.
The price of bitcoin has fallen nearly 60% since December. In recent months, regulators around the world have stepped up scrutiny of digital currencies and related assets, including some blockchain investments.
“Bitcoin’s 50-day moving average has dropped to the closest proximity to its 200-day moving average in nine months. Crossing below that level — something it hasn’t done since 2015 — signals fresh weakness to come for technical traders who would dub such a move a ‘death cross,’” reports Bloomberg.
According to coinmarketcap.com, the market capitalization or value of all digital coins stands at $329.6 billion as of Monday morning, down from $372.9 billion last Thursday.
“While many cryptocurrency investors don’t follow technical analysis, the digital-coin universe is drawing interest from professional traders who pay growing attention to the indicators, after the token vaulted to a record in December,” according to Bloomberg.
Bitcoin futures debuted on the Cboe in December, followed by a launch on the CME. Nasdaq Inc. is still considering entering the bitcoin futures competition. Market observers previously expected Nasdaq to launch futures on the digital currency this year, perhaps as early as the second quarter. After bitcoin, the largest cryptocurrencies are Ethereum, Ripple, Bitcoin Cash and Litecoin.
Some technical analysts believe bitcoin’s 2013 tumble could prove instructive this time around.
Paul Day, a technical analyst and head of futures and options at Market Securities Dubai Ltd. “studied the virtual currency’s 2013 tumble for clues on how it may act this time round. His conclusion? Gear up for a 76 percent tumble from late February highs, which would take Bitcoin to a paltry $2,800, if the downtrend is repeated. Bitcoin fell 2.2 percent to $8,120 at 11:17 a.m. in London, according to Bitstamp prices,” reports Bloomberg.
For more information on the cryptocurrency, visit our Bitcoin category.