Bitcoin has sharply corrected from its all-time high and has been struggling to reclaim that summit, leaving analysts and traders cautious as they contemplate whether the downward spiral will continue or if it is about to end.
Many have weighed in, and a majority seem to be convinced that only one of two things will happen: BTC rebounds, or it continues to sink, both seemingly equal possibilities given current factors.
Max pain under $80K
Analysts and trading firms have tagged the $73,000 to $84,000 range a critical “max pain” band for near-term expiries. It is hard to dispute, especially since that zone marks the average entry cost for major players, including BlackRock and Strategy.
If BTC should fall below the $80,000 mark, which is currently being treated like a psychological and technical support area, it could encourage more selling since it transforms the zone into a powerful resistance area that could send prices tumbling toward the $60,000 range and ultimately leave it consolidating between a $60,000–$80,000 range reminiscent of past mid-cycle corrections.
Short-term holders have reportedly dumped -62,000 BTC to exchanges at a loss, with November 22’s exchange inflows reaching $81,000, the largest since mid-July, something analysts believe reflects “peak fear behaviour.”
“Every past extreme like this marked seller exhaustion and a major bottom, supported by steady spot demand,” the analyst wrote. “Even if the full bottom isn’t in yet, a technical relief is getting close.”
Another analyst talking about the same subject implied that the dumping from short-term holders is a “surrender phenomenon” that is proof that the powers that be have succeeded in shifting current sentiments of market participants from bullish to bearish.
According to the analyst, “although the magnitude is different, the movement from the lows of the correction sections of this up cycle has been captured,” but that is not to say all hope is lost.
“If the current section is a correction section, it is the bottom,” the analyst wrote. “If the current period is a down cycle, the end of the decline is still far away. Currently, we need to keep both of these cases open and respond accordingly.”
He says a rebound could happen in the short term, but if that rebound is not sustained and it falls again to break under $80,000, tougher times could be ahead. It is a gloomy forecast, but the analyst says at least everyone can rest assured we won’t be seeing BTC fall by up to 70% from its peak as it did in past bear cycles.
BTC is under mainstream media attack
The surrender of short-term holders could herald a lower move or signal a bottom; however, investors seem to be preparing for the worst. The current price crash has also not gone unnoticed by mainstream media outlets.
USA Today, while reporting about BTC, described November as a “terrible, horrible, no good, very bad month.”
The Wall Street Journal implied that the industry is failing as it should be performing better under a pro-Bitcoin US president, growing institutional demand, and a maturing regulatory landscape. The article claims that “sky-high expectations of a golden age tumbling down to Earth” despite ETFs helping to make BTC less volatile,
“Crypto continues to struggle to break free of its reputation as the deranged, foul-mouthed little sibling of Wall Street, too volatile to trust, too entertaining to look away,” the article reads.
British newspaper The Guardian was less kind in a blistering editorial, resurrecting the crypto “generates no income, commands no productive capacity and pays no dividends” argument once more, while saying the rise of digital assets reflects a “one-shot society” where “millions are clutching at any chance, however illusory, to escape” an ailing economy.
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