Downside Risks Persist, Bitcoin Stalls Below $58k

As crypto analysts looked ahead to the week ahead, bitcoin continued to drift below $58K, as the strong dollar and profit-taking led to a week of potentially volatile trading activity. Ether held steady above $4,1K over the weekend.

As bull markets progress relative to other markets, older, more experienced sellers continue to sell, and newer, less experienced buyers absorb the supply.

A rising price will allow more HODLers to reach their target sale price. This leads to more coins being sold, opportunity cost being realized, and Reserve Risk on the rise and peaking at blow-off tops.

Furthermore, the current drawdown can also be attributed to leveraged long positions being liquidated and weak hands panicking selling mostly newer coins as a result of the current market conditions.

Long-term holders and miners, on the other hand, have remained steadfast and do not appear to be interested in selling at these prices.

In addition to checking out how holiday shoppers are reacting to the fastest consumer price hike in three decades, those tracking bitcoin as an inflation hedge will also keep a close eye on bitcoin prices as they rise.

In addition, supply-chain bottlenecks delay deliveries of some items while retailers are discouraged from offering deep discounts.

It is expected that U.S. President Joe Biden will announce his pick to lead the Federal Reserve this week.

Regulatory and monetary policy implications could arise from the announcement, despite the fact that some experts believe the two top candidates – current Chair Jerome Powell and Fed Governor Lael Brainard – hold so similar views there may not be much impact.

Bitcoin’s price remains confined to the pivotal $58k level over the weekend, with no signs of a break from the recent market pattern.

Price retracement to $53k is possible if prices fail to hold above $58.8K. Higher prices could trade as high as $61k, but gains will likely be limited to around $64.8k.