Bitcoin has fallen double digits over the last week amid a slew of bad news, and one strategist said this loss of momentum could prove negative for the cryptocurrency in the near term.
Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management, told CNBC’s “Trading Nation” that bitcoin’s decline over the last week (a loss of a little over 16 percent, according to Coinbase) may spook investors or appear as a dip to buy. But at this juncture, $10,000 per coin is the level to watch. Here are his reasons.
• Bitcoin hasn’t risen above $15,000 since Tuesday, and this apparent loss of momentum may lead to a decline in sentiment.
• The $10,000 mark, at which bitcoin has not traded since November, would be a psychologically important level for the cryptocurrency, which was trading a little over $13,700 per coin on Friday afternoon.
• If bitcoin were to breach that level once again, the critical question would become whether investors would step in to buy the dip or it would lead to further liquidation.
• Earlier this week, Warren Buffett, Berkshire Hathaway chairman and CEO, said cryptocurrencies would likely “come to a bad ending.” Bitcoin’s price fluctuated wildly this week, too, as South Korea was said to consider a ban on cryptocurrency trading.
Bottom line: Bitcoin’s price has fallen considerably since its highs late last year and could see further pain from a fundamental and technical standpoint, according to a foreign exchange strategist.