Bitcoin loses $55,000 amid fears over new South African Covid-19 variant
By Noemi Jansana / Alejandra Zamora
Date: Friday 26 Nov 2021
(Sharecast News) - Bitcoin and the cryptocurrency market succumb to the panic unleashed in the main financial markets on Friday, due to the alarm generated by a new variant of Covid-19 in South Africa, with numerous mutations. The queen of cryptocurrencies falls 6% and loses in intraday range $55,500 - support that has withstood until now the challenge during the recent correction from the historical highs at $69,000. The 'altcoins' are in the red and the total capitalization falls below 2.5 trillion dollars.
These events contrast with those on Thursday when, as experts had predicted, the US Thanksgiving holiday saw increased volatility in the cryptocurrency market, which turned into a small rally for Bitcoin and Ethereum. The 'altcoins' swung between red and green, with a small recovery for Shiba Inu, after its 60% correction. However, minus the Solana and Binance coin, those with the highest market value left declines for the week.
Bitcoin recorded four-day highs above $59,000 in the November 25th session, restoring optimism among experts that it will continue to increase its gains in the coming days. All in all, the reigning cryptocurrency sees its recent price range threatened, with support at $55,500 and resistance at $60,000.
"If the price breaks $60,000 again, perhaps this year's Christmas rally will be led by Bitcoin," commented Craig Erlam, analyst at Oanda. "In the shorter term there is resistance at $59,645, $60,000 in round numbers," stated José María Rodríguez, analyst at Bolsamanía, adding, "It would seem that above this resistance we will have a small turnaround figure, a prelude to what could be a return to the annual and historical highs at $69,355".
However, the recent behavior of the cryptoasset does not exclude an extension of the correction towards $53,000 - $54,500, where the Bitcoin future "continues to present an important support that can be attacked at any time," Rodriguez explained. "And around such a price range, the purchases should appear. What the price has made clear to us is that as long as it does not confirm above $60,000, we will not have any sign of strength and therefore the corrective phase remains intact," he maintained.
Analysts warn that bearish sentiment will take hold in Bitcoin before the expiration of the $3,000 options. Put options on the cryptocurrency have become more expensive amid fears of a rate hike by the US Federal Reserve.
Put options are attracting higher prices or demand than calls or bullish bets. At the beginning of the month, the three-month indicator stood at -5%, indicating a bullish bias. A positive bias does not necessarily mean that traders are making outright bearish bets, but rather that they may be adding downside protection against long positions in the spot or futures markets.
In any case, this indicates fear in the market, which is justified, given Bitcoin's 16% drop after reaching an all-time high of $68,990 on Nov. 10th.
ETHEREUM'S 10-DAY HIGHS FORETELL FURTHER RALLIES
Ethereum jeopardizes the short-term bullish look it achieved after the US holiday, when it earned its best 10-day price at $4,550. This meant it has comfortably broken the short-term resistance set at $4,300, but widespread selling across markets has caused it to return below this mark. All in all, its gains in 2021 are more than 345%.
The second largest cryptocurrency by market capitalization bottomed a bit earlier than Bitcoin, hitting $3,974 on November 18th. It´s recent price momentum indicates there is room to stretch the rebound. Moreover, in the options market, Ether buy orders are largely dominating the Nov. 26th expiration, which is a clear bullish sign.
All in all, the upside has been limited for now to the 61.80% Fibonacci retracement level at $4,519.78, from where there is further upside room to the 78.60% retracement level at $4,672.93.
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