Bitcoin market took a sharp dip, but it doesn’t seem to be finished crashing just yet
Bitcoin price extended losses this week and traded below $20,000 against the US Dollar. BTC/USD is currently in a bearish zone, and it remains at risk of more declines toward $17,500 or even $16,800.
Bitcoin price faced an increase in selling pressure this week and declined sharply below the $20,000 handle against the US Dollar. The price struggled to recover and remained in a bearish zone below $18,000 and $17,500. It even declined below the $16,000 support, opening the doors for more losses.
At the moment, bitcoin is trading slightly above $18,000, with a bearish angle. It recently declined and broke the $18,000 support area to move into a bearish zone. The price is down more than 5%, and it seems like there could be a test of the $17,500 support or even $16,800 in the near term.
The current price action is very bearish, with a couple of bearish trend lines forming on the hourly chart of BTC/USD. There is also a connecting bearish trend line forming with resistance near $18,380 on the same chart. The pair might continue to move down, and it could even test the $17,000 support area in the short term.
Overall, the bitcoin price remains in a bearish zone, and if it can’t move above $18,000 or $18,500, there could be more losses. On the upside, an initial resistance is near the 23.6% Fib retracement level of the last decline from the $23,140 high to the $17,867 low. Above $18,500 and the trend line resistance, the next hurdle could be the 50% Fib retracement level of the last decline from the $23,140 high to the $17,867 low.
On a day when Bitcoin’s price took a major hit, the overall sentiment of traders seemed to be that it was just a minor setback and that they were not surprised by the fall. The bottom line is that BTC may have fallen 15% this week but has recovered much better than its peers like Ethereum and Litecoin; in fact, both ETH and LTC lost nearly 30% each. While the decline may continue for a little longer, many traders believe that it is just a temporary dip in the overall uptrend of the price of Bitcoin, suggesting that the current price level presents an excellent buying opportunity for those who missed out on earlier gains.
What do technical indicators suggest about BTC?
The technical indicators are in favor of the bears for now. The relative strength index is well below the 50 level, indicating that there is more room for a decline in price in the near term. In addition, the MACD is also biased bearish and might move into negative territory if sellers remain in control. However, if BTC manages to recover above the $18,500 level, it could be a good sign for another move higher.
Source: Tradingview
The Ichimoku cloud, which is usually used to determine long-term trends in the market, suggests that there may be further losses for BTC. It points towards a downward trend line forming with resistance near $18,000 and the recent low of $17,867 on the hourly chart of BTC/USD. Moreover, there are many bearish trend lines formed with resistance above $18,000, which could prevent additional gains.
So overall, traders are still bullish on Bitcoin, despite its recent decline. The only question is whether or not BTC will manage to recover and hold above $20,000 in the short term. If it fails to do so, we could see it fall toward the $17,500 and $16,800 support levels. On the other hand, if BTC continues to move higher, there could be more gains in the medium term towards $21,000 and $22,000.
Conclusion
To conclude, the current price of bitcoin is likely to move lower in the short term before making a strong comeback. However, traders should always keep an eye on the key support levels and any signs of bullish reversals. As long as BTC/USD stays above $16,000, there is a strong possibility that the price will move back toward $20,000 and even higher in the medium term.
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About The Author
Moses is an experienced freelance writer and analyst with a keen interest in how technology is disrupting the financial sector. He has written extensively on the subject of cryptocurrencies from an investment perspective, as well as from a technical standpoint. He has also been involved in trading cryptocurrencies for over two years.
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Moses is an experienced freelance writer and analyst with a keen interest in how technology is disrupting the financial sector. He has written extensively on the subject of cryptocurrencies from an investment perspective, as well as from a technical standpoint. He has also been involved in trading cryptocurrencies for over two years.
