“This is a time to make sure that you have some dry powder and are not
overextended,” Chad Steinglass, head of trading at CrossTower, said in
an emailed comment. “It seems as though buyers are stepping back, and
instead of buying the dip are simply waiting on the sidelines to see
what happens.”
The largest cryptocurrency was unchanged to slightly lower Thursday,
at around $52,100 as of 19:19 UTC. Earlier, prices slid as low as
$50,360. Bitcoin hasn’t traded below $50,000 since March 8, well off its
all-time high above $61,000.
U.S. stocks were barely higher Thursday, churning below record highs,
while Asian and European markets were lower. Some of that weakness could
be hampering risk-taking spirits among bitcoin traders.
The U.S. dollar has strengthened recently to new highs in foreign
exchange markets. Bitcoin is negatively correlated with the greenback,
which means they often trade in opposite directions.
There’s also the monthly expiration looming Friday in the bitcoin
options market. Analysts have warned the “max pain” point – where buyers
have the most to lose and sellers the most to gain – would occur if the
price plunged to around $44,000. The risk is considered remote but
plausible.
“We’re currently looking for support in the range between $50,000 and
$48,000,” Hunain Naseer, senior editor at OKEx Insights, told CoinDesk.
“Any concrete signs of recovery are likely to show up after the options
expiry on Friday.”
In the meantime, CoinDesk reported Thursday that blockchain data might
be turning more bullish: An unusually large number of bitcoins are
being withdrawn from cryptocurrency exchanges and going to an illiquid
status – possibly an indication they’re being taken down by long-term
holders who are unlikely to sell their tokens anytime soon.
