As predicted, Bitcoin continued to drift below $60,000 after hitting nearly $69,000 as a new all-time high on November 10. In addition, since the U.S. Thanksgiving holiday is coming on this Thursday, trading activity also reduces.
Investors following bitcoin as an inflation hedge will also look for an early read on how holiday shoppers are responding to the fastest consumer-price increases in three decades.
Another highlight is US President Joe Biden signed a bill to upgrade the infrastructure. Depending on the interpretation of this document, it may turn out that miners, wallet developers, liquidity providers in DeFi-protocols and other players in the digital market may be required to report to the tax office. The crypto community is also worried about another amendment to the infrastructure plan, which will oblige recipients of digital assets over $ 10,000 to verify the sender's personal information.
Besides, there are also several other possible factors that are holding back Bitcoin's further increase.
The first factor is Bitcoin's high speculative activity. The number of short-term transactions on the market still prevails in comparison with long-term investments.
Another factor is the launch of the first US exchange-traded fund (ETF) based on bitcoin futures, which began trading on the New York Stock Exchange (NYSE) on October 19 and just two days after the start of trading, its assets exceeded $ 1 billion. Most institutional investors have the option to buy stocks and futures instead of buying BTC itself.
And the third factor is the overly optimistic sentiment of investors, who are confident in the further growth of Bitcoin and the entire cryptocurrency market. Along with this, a lot of speculative long positions appear on the market, which also hinders the further price increase.
From the weekly price chart, we can see that after the price reached a new high, a bearish divergence formed between the price chart and the MACD indicator lines. After investors began to take profits, the price turned south and at the moment has already touched both the horizontal support line around $ 58,000 and reached vertical support in the form of a 10-week moving average. Theoretically, the price is already in the zone from which a rebound and the third wave of a bullish rally are possible.
On the daily price chart, we can see that the price has already overcome two waves of decline and at the moment, after a slight rollback to the north, it looks like a third wave of decline may begin. During the second wave of decline, the price was already below the 38.2% Fibonacci level. Now, if the third wave of recession begins, the next will be the 50% Fibonacci level, which corresponds to the level of $ 54,300. And the next strong horizontal support is near the $ 52,900 mark.