Bitcoin lifted off its early morning lows today but if that doesn’t continue, and fast, the crypto bloodletting could just be getting started.

At 4.30pm AEST, BTC was changing hands for just under US$32,700, up from a low of just over US$31,000 this morning, although still down 1.8 per cent over the last 24 hours.

“The market sentiment is currently in a funeral,” Michaël van de Poppe, a full-time Dutch trader, said in a YouTube video last night.

If Bitcoin can’t hold support from US$32,000 to US$28,000, it’ll likely fall all the way to at least US$24,000, and maybe US$20,000, he said.

The best case would be a bounce back and a period of higher lows before making a run at $US35,900, then more accumulation before an attempt to breach $US40,000.

City Index analyst Tony Sycamore told Ausbiz TV that he saw a bullish-to-bearish reversal pattern known as a “head and shoulders” formation playing out, that coincides with a trendline from November.

“If that neckline breaks, then the next target is coming back to that US$19,666 high we can see there at the end of (December) 2017. So a lot really riding on for the next couple of days.”

There is a real chance Bitcoin will be setting a lower low, he said.

“This is potentially quite a bearish situation developing for Bitcoin.”

Perth-based market analyst Carl Capolingua with ThinkMarkets sees levels of support for Bitcoin at US$31,104 and US$28,876. Breaking those levels would mean a plunge to around US$19,930, he predicted.

The Twitter account Bitcoin Charts posted they were still a bit bullish on the weekly timeframe, but the road ahead looked rough.

“The bears have been in control and unless we can get back above 35k sooner rather than later, things for the bulls aren’t looking great.”

But some were suggesting a rebound could be quick.


Chinese blunder?

Jeff Yew, the founder of Brisbane-based Monochrome Asset Management, blamed the selloff on China’s crackdown on mining and trading of Bitcoin — marking the eighth time since 2013 that the country has enacted a “ban”.

“When an event like this happens you can be sure it will lead to short-term volatility – that is no surprise,” he told Stockhead in a text message.

“I see China’s move to ban Bitcoin as a geo strategic blunder for China but poses a huge gain for the world.”

Yew cited this tweet from Facebook’s head of payments and argued that Bitcoin mining infrastructure being re-distributed to the US would be a positive for the network.

“At close to 30 per cent renewables adoption and an accommodating regulatory ecosystem for Bitcoin mining, Australia needs to keep up with North America, Central Asia and West Europe to fight for a share in the biggest talent/investement migration out of China,” Yew said.

“This is a multi-billion, 5-digit job industry.”

It’s also worth noting that Bitcoin is still up 12.9 per cent year-to-date, and 184.6 per cent over the last year, Yew said.

“At Monochrome, we have a passive, long-term outlook on the digital asset so our position remains a hold and will do for the foreseeable future.”

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