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.