Tuesday, April 7, 2020

Support Levels Weaken as Bitcoin Price Drops Below $5,000

BTCNN aim to be the key source for both digital currency experts and newbies. With the cryptocurrency industry growing so fast we want to educate our readers about all the latest developments as they happen.
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The price of Bitcoin was immediately launched into depression as the week started wallowing bearishly in the market. The BTC/USD index fell from 5502-fiat to 4886-fiat on Monday, with over 11% market loss. Bitcoin price lowered and broke through support levels (a tool used in trading technical analysis) that previously held to bounce prices back up during trading.

Reasons for the Recent Fall in the Crypto Market

It’s been predicted that crypto investors are massively pulling out of crypto until the politics of the crypto world improves and the market recovers. The recent fall in the crypto market has been as a result of the Bitcoin Cash hard fork with big mining pools jockeying to decide the fate of the BCH protocol. Investors don’t want to hang around and watch their investments fall, which has led to the fall in the crypto market.

News from mainstream media has also helped increase the panic in the crypto world. Bloomberg recently predicted that Bitcoin would badly dip to a low of $1500. A prominent Bitcoin supporter, Tom Lee also predicted that with the fall of the market, his previous $25,000 end of the year prediction would no longer hold, but prices of $15,000 would seem more reasonable.

The US Dollar dipped to a new two week low driven by negative comments by the US’s Central Bank, the Federal Reserve. A bearish dollar riding on lows could prove bullish for commodities, its influence on bitcoin and other cryptocurrencies would be a thing to watch out for next year.

Using the Trend Line Method to Predict Future Prices

Below is the long price determination of Bitcoin using Technical Analysis tools:

BTC Price Chart forecast

The rate of the BTC/USD pair is falling inside a falling wedge. A break below the 100-period simple moving average is now pushing the pair towards its next potential support level at 4634-fiat. The level has demonstrated its level of strength during the consolidation action from August 2017 to September 2017. If the support level is broken, it would subsequently become an equally strong resistance level on the next potentially bounce back, from the range of $3500-$3580.

Bitcoin price

The market seems bullish for the falling wedge formation. However, the point of a potential reversal cannot be determined at this period; we all know how unpredictable Bitcoin could get in trades in from a falling wedge Typically, a breakout action resulting from a falling wedge goes up to the height of the wedge. The height is circa $4,300. Thus, a potential bounce back followed by a break above the upper trendline of the falling wedge could provide a medium-term bullish relief.

$543 will be the finishing point of the current falling wedge formation when it comes to the downside. Now, BTC/USD might not dip to that kind of crazy level.  It is only to provide a hypothetical long target should the price reverse from the very end of the wedge pattern. Basically, the worst we can recover towards $ 4,843. As at press time, Bitcoin is currently priced just below $4,500.

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