By Samuel Indyk & David Pichodo
Investing.com – The price of Bitcoin dropped back below $50,000 on Monday morning after a weekend of steady increases took the world’s largest cryptocurrency back above the key level.
Bitcoin had reached a low of around $46,800 early on Saturday before steadily increasing to around $50,800, a jump of around 8% in two days.
However, Bitcoin has edged back below the $50,000 level on Monday and trades around $48,900 at pixel time.
“After a brief rally over the weekend with Bitcoin temporarily breaking back above $50,000, the downtrend has come back into play with the resumption of softer price action and an extension of its losses since the peak in November,” interactive investor Head of Investment Victoria Scholar said in a research note. “Bitcoin has shed nearly 30% over this period with a clear descending trendline marked by lower lows and lower highs.”
Other cryptocurrencies have also shown signs of weakness with Ethereum, the second largest cryptocurrency by market cap, currently flirting with the $4,000 level.
“Ether is also under pressure shedding more than 2% with the next major support hurdle at $4,000,” Scholar added. “A break below could pave the way for further declines.”
Technical Picture
From a technical perspective, the 200-day moving average in Bitcoin stands around $46,800 and could act as major support.
A move below that level and the “flash crash” low from 4th December around $42,600 could be the next major support level.
On the upside, a clean break above $50,000 will be needed before a move towards trendline resistance that sits around $52,000.
The 100-day moving average near $54,500 could then act as the next major resistance level.