Bitcoin traders urged caution as prices for the cryptocurrency slid toward $50,000 for the first time in two weeks while the options market braced for volatility ahead of a record $6 billion contract expiration Friday.To get more news about WikiFX, you can visit wikifx.com official website.
“This is a time to make sure that you have some dry powder and are not overextended,” Chad Steinglass, head of trading at CrossTower, said in an emailed comment. “It seems as though buyers are stepping back, and instead of buying the dip are simply waiting on the sidelines to see what happens.”
The largest cryptocurrency was unchanged to slightly lower Thursday, at around $52,100 as of 19:19 UTC. Earlier, prices slid as low as $50,360. Bitcoin hasn’t traded below $50,000 since March 8, well off its all-time high above $61,000.
U.S. stocks were barely higher Thursday, churning below record highs, while Asian and European markets were lower. Some of that weakness could be hampering risk-taking spirits among bitcoin traders.
The U.S. dollar has strengthened recently to new highs in foreign exchange markets. Bitcoin is negatively correlated with the greenback, which means they often trade in opposite directions.
There’s also the monthly expiration looming Friday in the bitcoin options market. Analysts have warned the “max pain” point – where buyers have the most to lose and sellers the most to gain – would occur if the price plunged to around $44,000. The risk is considered remote but plausible.
“We’re currently looking for support in the range between $50,000 and $48,000,” Hunain Naseer, senior editor at OKEx Insights, told CoinDesk. “Any concrete signs of recovery are likely to show up after the options expiry on Friday.”
In the meantime, CoinDesk reported Thursday that blockchain data might be turning more bullish: An unusually large number of bitcoins are being withdrawn from cryptocurrency exchanges and going to an illiquid status – possibly an indication they’re being taken down by long-term holders who are unlikely to sell their tokens anytime soon.