It could take ”weeks, if not months” the recoup the recent Bitcoin price losses. That is at least the case if a Fundstrat Global Advisors analyst is to be believed.
The price of Bitcoin recently slipped below $5,600
All those following the cryptocurrency markets will know that Bitcoin recently dipped below the $5,600 price line. At the time of writing, Bitcoin is trading at a price level of $5,594.
Furthermore, a fresh Bloomberg report indicates that it might take some time for the market to recover. More specifically, Bloomberg references a note issued by Fundstrat Global Advisors to clients which calls the cryptocurrency markets ”deeply oversold.”
The analyst behind the note, Rob Sluymer, also noted that ”longer-term technical indicators aren’t so favorable” for the price of Bitcoin. Nevertheless, it should be added that Sluymer recognizes that there is room for significant price gains.
”This week’s breakdown produced significant technical damage that will likely take weeks, if not months, to repair to create a durable enough price ’structure’ to support a multi-month rally,” Sluymer wrote.
Nonetheless, the premise of a ”multi-month rally” might seem far off at the moment. Bitcoin’s recent dip to below $5,600 marks the first time the premier cryptocurrency has done so since October of 2017.
Industry actors highlight the dangers of price falls
Moreover, this represents a collapse of the longstanding $6,000 support level. Furthermore, the recent drop in the price of Bitcoin is particularly notable due to the levels of historically low volatility previously seen.
There are also other observers who have similarly noted the potential implications of Bitcoin’s price slide. According to a trader at the Tokyo-based eWarrant Japan Securities K.K. named Soichiro Tsutsumi, the loss of the $6,000 support level could be interpreted as a ”dangerous sign.”
According to Bloomberg, Tsutsumi also noted that this could particularly impact industry players with ”business models reliant on a client pool.”
The Bloomberg piece also recounts how several cryptocurrency-related firms, such as Monex Group – which owns Coincheck – and Japanese SBI Holdings have been adversely affected by the price fall, with the price of their shares similarly decreasing.
Nevertheless, Fundstrats’ analysts are reportedly adamant that Bitcoin’s current market trend is ”stressed, but not broken”. It remains to be seen how the cryptocurrency market will continue to develop in the coming weeks, and whether Sluymer’s prediction will come true.
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.