The decline in the price of bitcoin, which started on Sunday, continues throughout Monday. Not long before this publication, the price of the cryptocurrency approached the psychologically significant level of $ 30,000. The drop for knocks is more than 20%.
Today’s decline in bitcoin comes alongside the strengthening of the dollar index (DXY). It climbed to a two-week high of around 90.50. As a result, the two largest currencies – digital and traditional – once again showed an inverse correlation.
In early September 2020, Bitcoin dropped from $ 12,000 to $ 10,000 and remained in a sideways channel for the entire month as the DXY rallied from 91.75 to 94.75. In the following months, the dynamics changed to the opposite.
“The price of bitcoin has risen on the back of an increase in money supply and inflation expectations. At the same time, the dollar fell to a multi-year low, ”analysts from Kaiko Research noted in their December report.
“Most likely, the correction will lead us to the 21-week moving average in the coming weeks. Most markets will then return to reality and equilibrium. There is nothing to panic about with Bitcoin, ”says analyst Michael van de Popp and draws the following tentative scenario:
Scott Melker notes that the last 12-hour candlestick on Coinbase was the largest since the market crash in March 2020.
“I don’t know where the course will go, but this fact deserves attention since the price drop is confirmed by volumes,” he adds. “These are real sales.”
Some analysts count on on the imminent easing of the downward pressure as a result of reaching the support held at the lows of the last month and the zone of increased buying activity. By the time of publication, they managed to partially win back positions up to the level of $ 33,400.
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