Bitcoin price analysis: recovery attempts go down the drain, BTC/USD bears drive the price to $6,400 handle
- BTC/USD touched $6,400 for the first time since September 29.
- Bitcoin hedge funds are losing both money and customers.
BTC/USD dropped below $6,500 and touched $6,400 handle during Asian hours on Thursday. The downside momentum is gaining traction on breakthrough of an important technical level that supported the coin since September 29. Currently, BTC/USD is changing hands at $6,424.
What’s going on
Bitcoin-focused hedge funds are starting to feel the pain, battered by a steady downside trend on the cryptocurrency markets. The digital coin No. 1 has lost over 54% since the beginning of the year which caused some hefty losses for the market players. Thus, the net asset value of US-based Grayscale Bitcoin Investment Trust (GBIT) hit the lowest level since the cryptocurrency stellar growth in the end of the previous year. The shares of the Trust has followed the same trend and lost 80% since December 2017, when BTC reached its al-time high at $19,511, Bloomberg reports.
Moreover, investors are angry with hefty fees charged by the Trust, saying they are unreasonably high. GBTC takes $20 fee for each $1000 invested.
“Expense ratios are insane for these funds and the current Bitcoin price is creating more problems,” Naeem Aslam from Think Markets U.K explained.
Bitcoin’s technical picture
The local support is created by $6,400 (psychological level and Asian low). Once it is cleared, the downside may be extended towards and $6,327, which is the lowest level since September 25. On the upside, the short-term recovery is capped by $6,500 (former support) with a cluster of 1-hour SMAs seated at $6,540-60. A sustainable movement higher is needed for an extended recovery towards $6,600.
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Author
Tanya Abrosimova
Independent Analyst
