Bitcoin Remains Under Pressure but ‘Correction Could Be Complete’

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Bitcoin
and other cryptocurrencies were little changed Friday, remaining under pressure after a recent selloff wiped away most of the gains from the latest crypto rally. However, the tokens could be steadying with the brunt of the declines done.

The price of Bitcoin has traded near flat over the past 24 hours at $26,750, having been near $28,000 at the start of the week, before a selloff drove it down to its lowest levels so far this month. The largest digital asset is now back in the $26,000 zone, a region that dominated for more than a month until a late-September rally and defined a stagnant range amid historically low volatility and trading volumes.

“Bitcoin failed to breach a key technical resistance—its 200-day moving average—at the start of the week and dips below $27,000,” said Yuya Hasegawa, an analyst at crypto exchange Bitbank. “Some market watchers pointed out the geopolitical risk regarding the confrontation between Hamas and Israel as the catalyst for this week’s decline in Bitcoin’s price.”

Indeed, while the
Dow Jones Industrial Average
and
S&P 500
 have been mostly resilient against the backdrop of fresh conflict in the Middle East, crypto market participants look more cautious. Analysts have suggested that crypto traders have trimmed bullish bets amid fears that an escalation of violence could see oil prices spike. That would renew inflationary pressures that may force the Federal Reserve to keep interest rates higher for longer—a headwind for the riskiest assets, like tokens.

Against that backdrop, Bitcoin has notched losses, though there is reason to believe the worst could be over, at least for now.

“The technical sentiment has deteriorated for Bitcoin,” Hasegawa said. “The price has already retraced half of the rise since September, so the correction could be complete and the price will likely consolidate around the level a tad below $27,000 in the near term.”

Beyond Bitcoin,
Ether
—the second-largest token—was near flat at below $1,550. Smaller cryptos or altcoins were more buoyant, with both
Cardano
and
Polygon
up less than 1%. Memecoins exhibited more of the same, with
Dogecoin
and
Shiba Inu
advanced less than 1% each.

Write to Jack Denton at [email protected]

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