“Bitcoin’s Weekend Sell-Off Did A Lot Of Damage To Momentum, Analyst Suggests
A Crypto analyst, Katie Stockton has suggested that Bitcoin’s weekend sell-off did a lot of damage to momentum.
Bitcoin fell as much as 27% over the weekend, catapulting the almost $1 trillion cryptocurrency into bear market territory and leading to a breakdown in several technical momentum indicators, according to Katie Stockton of Fairlead Strategies.
“The decline was likely in part technically-driven, exacerbated by the derivatives market, and not helped by the downside momentum behind high-growth stocks on Friday, to which bitcoin has been positively correlated,” Stockton told reporter over the weekend.
And while bitcoin has been known for staging swift and sizable recoveries from prior declines, Stockton is urging caution to investors eager to buy the dip as short-term and intermediate-term momentum is now bearish.
Stockton says she eyes bitcoin’s next support level of $44,200, which represents downside potential of 13% from current levels.
On the other hand, resistance for the cryptocurrency is $55,000, according to Stockton, representing potential upside of 8%.She also worried that a “sell” signal, generated by the weekly moving average convergence divergence indicator, or MACD is causing a lot of investors to panic sell.