Bitcoin loses critical level - correction is taking place

Bitcoin loses critical level - correction is taking place
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All the uncertainty over whether $BTC would hold above $41,000 now appears to have been cleared up. $BTC dropped this level on Monday and is now heading lower. How far down is the price likely to go?

Bitcoin drops critical support

Source: Trading View

The feared bitcoin correction appears to be in the making. $BTC has currently just dipped below $39,000, with the next level of support at around $38,000. A bounce could be likely at any time, but the up trend is now broken, and so any bounce is probably going to be short lived.

Which major support level?

Source: Trading View

Looking at levels of support further down, it can be seen that there are two major support levels, first at $34,000, and then at $30,000. 

The issue with going all the way down to $30,000, which is the base for phase two of bitcoin’s bull trend, is that most of the market will be waiting to buy at this level, and the chances are that many traders may not get their buy orders filled. Sensible investors wishing to make sure they get their buy orders filled would possibly start scaling them in from the $34,000 support, and even perhaps higher.

Get your buys in early

At the end of the day, bitcoin is a scarce commodity. A supply of only 21 million, with 19 million of that already in circulation, and around 20% of that lost forever, means that all interested investors will want their piece of a very desirable bitcoin pie.

Heavy selling from Grayscale fund

That said, for the present time bitcoin is under the cosh, as the Grayscale Spot Bitcoin ETF continues to sell $BTC heavily, recording an outflow of around $2 billion since the ETF was approved by the SEC and went live.

A large part of the Grayscale $BTC sell-off came from the bankrupt FTX exchange as it sold off nearly two thirds of its Grayscale BTC holdings in only the first few days of the fund trading.

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