Time For Autopsy? Bitcoin May Plunge Further After Dive Below $30k


Bitcoin’s next bull market is building a bottom now. As a result, bears continue to dominate the market, sending the bitcoin price below $29,000 in the last 24 hours. Traders who anticipate the end of a bear market may have to wait longer due to unfavorable conditions.

Will he track Bitcoin?

Bitcoin is no stranger to retracements above 20%. There have been more fundamental corrections in Bitcoin’s history than this current date.

Those who have spent long enough to remember past crashes of over 50% in less than a month can attest that this is just another bump. Since the inception of Bitcoin, there have been about seven price corrections, with the price halving. Bitcoin has always bounced back after each of these corrections.

Bitcoin dropped 83% in a short period of time in April 2013. When China first banned Bitcoin in December of that year, it dropped another 50%.

BTC/USD slides below $30k. Source: TradingView

2018 was a difficult year. Although it reached an all-time high of about $20,000 in December 2017, it was only worth about $3,000 in December 2018.

More new investors will remember the crash in March 2020, when Bitcoin plunged 50% in just a few days. In May 2021, the same event happened.

Related reading | New data shows that China still controls 21% of the global Bitcoin mining hash rate

Despite this, the markets are in chaos today, with Bitcoin dropping more than 20% in the previous week and more than 50% from its all-time high in November 2021.

The 200-week moving average (WMA) is probably the most reliable and straightforward chart to provide some information about Bitcoin’s current situation. It usually bounces back quickly from the 200 WMA. Only twice in history has the bitcoin price fallen below the 200 WMA, and both times it was only for a short time. For over a month, it has never been below the 200 WMA.

The price of the WMA 200 for Bitcoin is now around $22,000. With the current price around $29,000, it is likely that the price will drop or trade sideways for a while, but the worst is likely behind it.

Bloomberg Analyst Believes Bitcoin Will Fall

Despite the recent rally of 15% from last week’s lows, Bloomberg analysts believe that the major cryptocurrency will continue to decline. Bitcoin now appears to be more fragile than before.

to me Article, The recent rally of Bitcoin has created a “dish top” pattern on the hourly BTC chart. A head and shoulders pattern appeared inside it, which indicates a change in trend from bullish to bearish.

Bitcoin

Source: Bloomberg

After bitcoin fell below the pattern’s neckline, the pattern was activated.

In order to avoid a further decline, the price of Bitcoin must now rise above $30,800.

Santiment’s bitcoin stats show that market sentiment is lackluster as traders remain indifferent. On May 18, the S&P 500 fell more than 3%, sending bitcoin down with it. In fact, since the beginning of 2022, the correlation between the Nasdaq 100 and Bitcoin has remained close, which makes it a good indicator for predicting Bitcoin price movement.

Bitcoin-U.S. Equity Market Correlation. Source: Santiment

Nasdaq-100 futures and other US index futures are down about 1.5 percent at the time of writing. It indicates that the price of Bitcoin may continue to decline. In fact, today the Asian and European stock markets are down more than 2%.

On the other hand, whales seem to expect a bottom to continue accumulating. According to Rekt Capital, Bitcoin’s RSI has now reached the level where long-term investors have made the largest profit historically.

Related reading | Funding Rates Drop to Annual Low After Bitcoin Drops Below $29,000

Featured Image by Pixabay | Charts by TradingView



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