Crypto Risk ‘High’, Next Bitcoin Price Support Below $14,000, Ethereum Below $500 – Fairlead Strategies

(Kitco News) Although notorious for its volatility, Bitcoin price action has been somewhat muted as the world’s largest cryptocurrency picks up the straw to hold the $20,000 level after the June sell-off. And if this support level fails, it could open the door to $14,000, according to Fairlead Strategies.

The cryptocurrency market is still reeling amid rising contagion risks, with the total market capitalization dropping to $946 billion on Wednesday. Adding insult to injury are reports that crypto hedge fund Three Arrows Capital (3AC) has been liquidated.

It comes after crypto broker Voyager Digital sent a virtual notice to 3AC on Monday after the hedge fund failed to make payments on its loan of 15,250 Bitcoin, about $324 million, and $350 million of USDC stablecoin.

Singapore-based 3AC is one of the most prominent cryptocurrency hedge funds that has had a hard time amid this crypto crash.

At the time of writing, Bitcoin is trading at $192, which is pretty much flat on the day after briefly dropping below $20,000 overnight. Ethereum, the world’s second largest cryptocurrency, was valued at $1,109, down 4.6% from today.

“Bitcoin has stabilized after the reaction to short-term oversold indicators last week, supporting a short-term neutral bias within a longer-term downtrend,” Katie Stockton, founder and managing partner of Fairlead Strategies said in a note this week. “Risks remain high given the recentness of the major crash below $27.2K, with medium and long-term momentum still strongly negative.”

Looking at the technical levels, it is important to hold the support area between $18,300 and $19,500. Otherwise, a move to $14,000 appears likely, Stockton wrote. “Secondary support will not even be the 2019 high, near $13.9K,” she said.

The initial resistance is around $27,100, but Bitcoin does not seem to have a direction on its side to reach that level in the short term. “Bitcoin is recently considered to be long-term oversold according to monthly stochastics, but it will likely take several months to register a long-term oversold ‘buy’ signal,” Stockton added.

Meanwhile, Ethereum fundamentals also point to increased downside risks, with the next support level below $500 if current levels fail to hold, according to the note.

“Ether’s next support is near $490, which is a minor level based on the September 2020 high, with a more significant support around $363,” Stockton said. “Previous support $1,733 is resistance but not likely to fit… Like Bitcoin, Ether is in fresh oversold territory from a long-term perspective, but a somewhat recent bearish shift in long-term momentum supports the downside. extended.”

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