Analysts pinpoint bull and bear scenarios as Bitcoin price dips below $56K

Cooler heads are calling for a collective deep breath and a step back to see the long-term outlook for the future of Bitcoin (BTC) price and the wider crypto market, but today's drop back under $56,000 is raising eyebrows among traders.

Data from Cointelegraph Markets Pro and TradingView shows that after starting the week near $60,000, several days of bears hammering the price of Bitcoin resulted in a revisit to $55,600.

Heres what analysts have to say about the latest price action from Bitcoin and what to look out for in the days ahead.

Keep an eye on the monthly close

A closer look at the monthly price action for Bitcoin was discussed by independent market analyst ‘Rekt Capital’, who posted the following chart showing that BTC is close to reclaiming an important monthly close level near $58,728.

According to Rekt Captial, the price action for BTC has been “promising” thus far and is now “really close to reclaiming this monthly level as support (green),” but the analys cautioned that there could still be plenty of volatility in the near term as the market closes out the month of November.

Rekt Capital said,

Mt. Gox trustee to distribute 145,000 BTC

Insight into the possible reasons behind the pullback was offered by David Lifchitz, managing partner and chief investment officer at ExoAlpha, who pointed to the Nov. 16 announcement that the trustee of Mt. Gox that will distribute around 145,000 BTC to retail investors who had purchased them on the exchange between 2013 and 2015.

Lifchitz highlighted concerns some have that many of these “mom n pop investors” who stand to “receive a windfall in the near future” due to BTC being 100 times higher than their original purchase price “will probably cash them out at any price, which will probably hit pretty hard the market when the news of the effective distribution will break.”

As for now, Lifchitz feels that “the selloff seems to be over at the $57,000 to $58,000 support level,” and looks “ready to reach again toward $63,000 and above in the next few days.”

But caution is warranted moving forward, according to Lifchitz, as the threat of a future sell-off once the Mt. Gox BTC are released.

Lifchitz said,

Historical analysis suggests Bitcoin price may have bottomed

A final bit of insight was offered by analyst and pseudonymous Twitter user ‘TechDev’ who posted the following charts comparing the 2017 price action for Bitcoin with the current market.

According to TechDev, the current correction is “following 2017's mid-Nov to near perfection” with the “only minor difference” being “a break of the 50-day simple moving average (SMA).”

TechDev said,

The overall cryptocurrency market cap now stands at $2.51 trillion and Bitcoins dominance rate is 41.9%.