By Samuel Indyk
Investing.com – The price of Bitcoin dropped below $60,000 on Wednesday as the correction from the all-time high hit last week gathers pace.
The surge to a new record last week coincided with the launch of the first Bitcoin Futures ETF, the ProShares Bitcoin Strategy ETF (NYSE:BITO). Some analysts had speculated that the launch of the ETF could mark a near-term peak as has been the case when other similar events occurred.
Earlier this year, the IPO of the cryptocurrency exchange Coinbase (NASDAQ:COIN) marked the high print. Similar price action was observed in 2017 when the first Bitcoin Futures contract launched on the CME. A bear market occurred in early 2018 and it took almost three years for the price of Bitcoin to recover.
After hitting a high just below $67,000 on 20th October, Bitcoin has now dropped over 13% to the current level around $58,800.
There did not appear to be any fundamental news behind the latest moves, rather a correction after dropping through the psychological $60,000 level.
Technical Analysis
Technical analysts will be looking for a sustained period of time below $60,000 to confirm a more bearish outlook for the world’s largest cryptocurrency.
For now, $58,000 appears to be a key support level, while the zone between $57,600-$57,800 represents the high points from the 11th-13th October and could also act as support.
Altcoins
Other major cryptocurrencies have also been dragged lower by the decline in Bitcoin. Cardano has dropped below $2.00 and Ethereum briefly dropped below the psychological $4,000 level but has since rebounded and trades just above there.
“This appears to be a somewhat expected correction as the market was in an extended upward move despite Bitcoin trading sideways in the last few days,” said XTB Market Analyst Walid Koudmani. “The situation remains uncertain, but it seems that Bitcoin’s performance continues to be crucial for the overall market and any significant moves for the main cryptocurrency will be amplified for the rest of them.”