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Bitcoin tests support around 2017 peak

In the week leading up to Christmas 2017, Bitcoin was in its (relatively) heady days with a then-record high at $19,511.

In the five years since, that period has seen an astronomical tripling of prices, with the present record high standing at just below $69,000, before it all came undone with a peak-to-trough drop of as much as 74.5%.

In recent weeks, that 2017 peak has been tested as a crucial support level for the world’s largest cryptocurrency, with Bitcoin traders now wondering whether this mid-$19,000 region marks the true floor for the selloff that has persisted over the past 10 months.

Bitcoin tests support around 2017 peak

Since last Friday’s US jobs report, which strengthened the argument that the Fed is bound to hike US interest rates at a faster clip, Bitcoin has mostly traded in sub-$20k territory.

Overall, this is a slippery environment for risk assets, from stocks to cryptos.

Central bankers worldwide are hiking their respective interest rates to incur some demand destruction with hopes of cooling inflationary pressures. Such an aggressive battle against inflation may also inadvertently push the global economy into a recession.


Bitcoin and Ether diverge

Not only do Bitcoin bulls have to weather macroeconomic concerns, but they could be losing out to Ethereum over the immediate term, as the world’s most commercially important network is set to undergo a historic upgrade known as “the Merge”.

This highly-anticipated event, years in the making, is due to happen sometime this month and could attract more inflows into Ether at the expense of Bitcoin in the interim.

We’re already seeing some of this theme play out in diverging prices between Ether and Bitcoin of late, with the former boasting a near-6% month-to-date gain, while the latter is down 1.8% so far this month (at the time of writing).

Bitcoin vs Ether diverge so far this month

Should traders and investors sell out of Bitcoin in hopes of capturing more of Ether’s post-Merge gains, that could spell another leg down for Bitcoin.

And of course, as witnessed in recent months, a further jolt of risk aversion sweeping across global financial markets has resulted in further declines for risk assets.

In short, Bitcoin bulls have all to do to ensure that the 2017 peak at $19,511 can truly shore up Bitcoin prices adequately amid this challenging environment for risk appetite.



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