Investors say Bitcoin’s drop to $57K is a ‘good entry point’
On Nov. 18, bitcoin’s price dropped below $57,000, sparking a sell-off in ETH and other cryptocurrencies. However, traders say the current range offers an “attractive entry” to holders.
Market Update
Data from Cointelegraph Markets Pro and TradingView indicates that support at $60,000 was breached early on in the United States trading session, which allowed bears to briefly take control of the market.
The price of Bitcoin (BTC) dropped to fresh lows on Nov. 18, and the brief visit to the $56,000 level resulted in a sharp sell-off in Ether (ETH) and altcoins.
Here’s what analysts have to say about the day’s price action and whether or not traders should be concerned about additional downside.
Major drawdowns are likely to be brief
Several cryptocurrency research firms recently reported that the initial sell-off was mostly driven by liquidity rather than a fundamental shift in narrative, suggesting that this pullback is likely to be short-lived and may present an opportunity for traders looking to gain exposure to the market.
Delphi Digital highlighted that while there had been a significant amount of deleveraging seen across the market over the past week, it didn’t help prevent the overall increase in “aggregate liquidations across major exchanges coinciding with each sizable price dip.”
As for what comes next for BTC, Delphi Digital sees the possibility of a dip to $55,000 “if continued selling pressure forces BTC below $57,750,” but the analysts also suggested that any “any drawdown will be relatively short-lived.”
Delphi Digital said:
“If BTC takes another leg lower it could set up an even more attractive entry for those with long-term conviction looking to accumulate.”
Also on Nov. 18, the firm expressed similar sentiments regarding the price action of Ether, which briefly fell under $4,000 earlier that day. According to Delphi Digital, Ether is trying to turn a long-term resistance level established back in May into support, suggesting that if it manages to do so it will “look primed for trend continuation to the upside.”
Delphi Digital said:
“If price support gives way, the hope for bulls would shift to a possible retest and bounce off the upper trend line established from the May 2021 top to the Sep. 2021 high.”
Holders who plan to hold for a long time should be comfortable
Further analysis on Bitcoin’s price was provided by options trader and pseudonymous Twitter analyst “John Wick,” who posted the following tweet highlighting the fact that even experienced traders are finding themselves concerned by Nov. 18’s price action.
We are really trying hard to hold that support zone I’ve had up. NGL I’m not too happy to see that red bar
Does not mean we fail the support 100%, but it is telling us the probabilities are starting to stack against it holding
If you’re long term this shouldnt bother you pic.twitter.com/D4EvI8RcnD
— John Wick (@ZeroHedge_) November 18, 2021
The dip in price seriously challenged the lower bound of the current support zone, as “probabilities are starting to stack against it holding,” which Wick pointed out is really only an issue for short-term traders and that long-term hodlers shouldn’t be too concerned by this type of price action.
Related: Bitcoin falls to a 1-month low after a 6% dive drops BTC price to $56.6K
The Ethereum market continues to hold a bullish structure
As far as Ether is concerned, market analyst and pseudonymous Twitter user “Pentoshi” posted the following chart highlighting the break below the previous ascending channel and retest of the support and resistance level found at its previous all-time highs.
While some traders in the market have taken this as an ominous turn of events, Pentoshi sees the move as a positive development because it “is one of the things in the market still with bullish market structure.”
Pentoshi, however, did offer a few words of caution, saying:
“What you don’t want to see is it going back under those ath’s on a closing basis.”
The overall cryptocurrency market capitalization now stands at $2.508 trillion, and Bitcoin’s dominance rate is 43.4%.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, and you should conduct your own research when making a decision.
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