A 20% decline in BTC trade value has caused the world’s leading cryptocurrency to reverse to resistance levels. The reason for the price loss might not be unconnected with the profit-taking on the market.
Gloomy Period Ahead for Bullish Traders?
As BTC/USD hit a new value of $45,000 on Bitstamp today, analysts from Tradingview and Cointelegraph predicts a tough period in the future for BTC bullish traders. On Monday, the 20% value crash was a decline on a bounce that has seen the currency peak to nearly $58,000 – its 12-day low since the first month of this year.
The bounce started from a little over $45K to $54K before another decline caused its value to slash further. As of press time, the path remains fuzzy as massive volatility remains in existence, and support remains at about $46,500.
If that support level should break down and without any support at the $47,000 levels, there is little hope to stop or reverse the downward trend as predicted by technical analysis.
$50,000 Might Be the New Resistance Levels.
Most analysts aren’t afraid of any severe price decline since this dip would be insignificant in comparison to the past price dips that they’ve experienced.
Crypto analyst Micheal van de Poppe’s tweet summarizes the whole situation: “this is nothing compared to the 2018 and 2019 experiences.” Other significant losses include the 2017 bubble when BTC reversed to $3000 from a then $20,000 high and the 2011 price crash from $29 to $2.
Van de Poppe followed up his tweet with a YouTube video, and in the video, he predicted that if the bears are sustained, Bitcoin is only behaving true to character. It usually experiences corrections in March of every year.
One other reason for this loss might be the recent increase in the inflation-adjusted US Treasury which diluted the cryptocurrency’s appeal as an inflation hedge. He added a tweet, “we might be close to a bitcoin bounce.” Various reports give reasons for this decline; some are natural market cycles and whale sell-offs.
Long-Term Bulls Have Nothing to Worry About
However, there might be a likely return of the bullish pressure experts predict that Jerome Powell (who is the federal reserve chair) will likely inform congress of the central bank’s desire to maintain low-interest rates.
Also, as the United States Central bank aims to continue its bond purchase program to boost liquidity, equities and BTC are expected to have a cushion since the program is likely to lower bond yields.
Bitcoin should remain bullish over the long-term since there are no indications that there would be a decrease in the inflation-boosting stimulus.
As of this writing, bitcoin has experienced about 10% drop on the day’s trading as it’s currently valued at a little over $48,000.
Since more big firms continue to identify BTC as the best alternative to gold and keep investing in it, bulls will consider the current price gravity as an unavoidable correction and not an existential threat.