A massive price dump occurred in the start of the day that sent Bitcoin spiralling out of control to as low as $41k before recovering later on to $48k at press time. The largest digital currency by market capitalization finally gave way to the long-term bears as they struck fearlessly, bringing down several long-term support levels in the process. Now, it seems like the digital currency sector will be forced to undergo price consolidation till the new year unless it posts a strong recovery back above $55k in the immediate future.
While the size of the earlier crypto carnage shocked a lot of users, the signs of a price reversal were evident in the market right now. Despite several encouraging news and stats, the market just was wasn’t responding enough ever since it has plunged below $60k in the middle of last month. For the bulls, this was always worrying, at least in the short-term as it would mean more and more work to recapture the bullish trend again and the index kept on receding, albeit slowly, lower and lower. The bulls themselves were very slow and weak to respond to these smaller, yet significant price drops in the second half of November and as a result, the price just kept going down and down.
Then December arrived and its own start didn’t go as well, giving rise to more Fear, Uncertainty and Doubt (FUD). Finally, all the pressure gave way and Bitcoin is now well below $50k. It got to as low as $41.5k earlier in the day before recovering back to this level. The overall market capitalization of the crypto sector has also taken a heavy hit and it is now less than $2.3 trillion at press time, having went even below $2 trillion at one point during the day before subsequent recovery. Bitcoin itself is now worth less than $1 trillion @ $930 billion.
According to this trader on Twitter:
OK so immediate post dump synopsis:
$50k is likely to be resistance for a decent amount of time now unless stonks to incredible things.
Size of dump & distribution likely to mean consolidation into Q1 next year.
Moon mission is not dead but some will think cycle over. pic.twitter.com/4iSM295pVS
— filbfilb (@filbfilb) December 4, 2021
While the short-term trend is now heavily dominated by the bears, the long-term trend still has some hope. While not being dominated by the bears, it is currently a mixed bag with the $40k support acting as the point of reversal in this regard. With the holiday season ahead, it is expected that things will recover later on by the end of the month or they could recover a lot quicker if the bulls can provide the necessary confidence.
Image Source: pixabay.com
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