Market analysts comment on bitcoin’s latest price movements. (Photo illustration by Chesnot/Getty … [+]
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Bitcoin prices have been struggling lately, dropping to a six-month low on January 24 and then failing to surpass $40,000.
The digital currency, the largest by market value, climbed to an intraday high of $39,262.10 this morning, according to CoinDesk data.
After rising to that level, the cryptocurrency fell back, declining below $38,500 and then rising toward $39,000, additional CoinDesk figures show.
At the time of this writing, the digital asset was trading close to $38,500.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Following these latest developments, several analysts offered some perspective on bitcoin, including what key variables are affecting its price and where the cryptocurrency might go next.
Financial Market Contagion
Josh Olszewicz, head of research at Valkyrie Investments, spoke to the situation, emphasizing the interconnectedness of markets.
“Bitcoin continues to correlate strongly with traditional market indices, specifically the S&P 500 and Nasdaq,” he said.
“Legacy markets will likely need to settle down and stabilize before BTC has a strong recovery off of 2021 range lows,” added Olszewicz.
Further, he mentioned the Cboe Volatility Index, or VIX, a measure of expected volatility in the S&P 500.
“The VIX also remains significantly elevated. Historically, spikes in the VIX have presented excellent longer term dip buying opportunities.”
The market observer also leveraged the Relative Strength Index, a measure of whether an asset is overbought and oversold, which indicated that bitcoin prices may be headed for upside in the near future.
“Bitcoin did hit a multi-month RSI low over the past few weeks, last seen…
