Bitcoin holds drop, set for worst month since May crypto rout

  • Internet
  • Wednesday, 29 Dec 2021

Crypto converts expect the Bitcoin bull market to return in time and point the digital asset back at the record high of almost US$69,000 (RM288,592) hit last month. — Bloomberg

Bitcoin is holding onto its recent drop, leaving the token on course for its worst monthly drop since the cryptocurrency rout in May.

The volatile token was trading at about US$48,000 (RM200,760) as of 1.40pm. Wednesday in Singapore, following a near 7% drop from a day earlier. It’s retreated some 16% this month, while the wider crypto universe has shed about US$260bil (RM1 trillion) of market value over the period, according to tracker CoinGecko.

Demand for the most speculative investments has waned as 2021 comes to a close, in part as the Federal Reserve pulls back on the exceptional stimulus that helped to lift a variety of assets this year.

There’s talk of "a leveraged unwind in Bitcoin longs going into year-end,” said Ben Emons, global macro strategist with Medley Global Advisors LLC. He added that "could be a damper on risk sentiment for a very brief period.”

Strategists are keeping an eye on key technical levels to try and figure out clues about Bitcoin’s outlook.

Katie Stockton, founder and managing partner of Fairlead Strategies, an independent research firm focused on technical analysis, said Bitcoin’s next level of support is around US$44,200 (RM184,866), based on a Fibonacci retracement.

The token’s wobble this month has pared its year-to-date climb to about 65%, still ahead of traditional assets like global equities and commodities.

Crypto converts expect the Bitcoin bull market to return in time and point the digital asset back at the record high of almost US$69,000 (RM288,592) hit last month. Among their arguments is the controversial idea that the token offers a hedge against inflation.

"The arc of history is long,” Graham Jenkin, chief executive officer of crypto exchange CoinList, said on Bloomberg Television. "Over time Bitcoin is going to be a pretty superior asset to invest in.”

It could be that a dip in trading volumes over the Christmas holiday period is exacerbating price moves.

"I’m going to go out on a limb though and classify this as low-volume holiday-season funk,” said Mati Greenspan, founder of market analysis, advisory and money management firm Quantum Economics, referring to recent performance. – Bloomberg

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