Since the 2021 price rally, bitcoin has traded below $29,000 for the first time. While it started the year at about the $29,000 mark, bitcoin has just touched that amount briefly today in what is now a crypto market bloodbath.
BTC/USD chart. Source: TradingView
Bitcoin Plummets Below $29,000
Right now, the leading cryptocurrency trades at the price it was at the beginning of the year. This decline has been fast and precise, with the price of some virtual assets being cut by 50% in less than five weeks and giving rise to the worst monthly closes ever.
Most altcoins have lost 70% of their value, while bitcoin also declined by over 50%. Most analyses are negative, with some suggesting that bitcoin’s price decline below $30,000 is the consequence of more coins being listed on exchanges.
The Doji on the 12-month BTC/USD chart. Source: TradingView
Is The Bullish Run Now Over?
During the past quarter, the bitcoin price rose by over 50%. But the rally reached its peak when NASDAQ publicly listed exchange giants, Coinbase global, and the crypto market excitement knew no bounds. Often, markets react in the opposite direction when participants are making money quickly, and they least anticipate any reverse direction for the market.
Everything was smooth and fabulous in the crypto world. Even Elon Musk (who, at that time, was a great bitcoin supporter) was about to be a guest on Saturday Night Live. Unfortunately, the unexpected happened; the market reversed and has been on that downward trajectory since that time with little bounces here and there.
The consequent selloff has been one of the most aggressive since the inception of bitcoin. The current candle (the gravestone Doji) isn’t giving any sign of hope and, as its name suggests, can result in devastating consequences.
The only hope for bulls is that the year hasn’t ended yet, and there is still room for a turnaround. The current crypto market structure, analysis, and bitcoin price movement are reminiscent of the last time the entire market went on a hiatus.
A bounce could happen soon, provided that exact history is about to repeat itself. The remaining patterns show that the downtrend is far from over. However, anything is possible since the leading cryptocurrency has broken the $29,000 low for this year.
It is unlikely that there will be a squeeze like the last time because there aren’t enough short positions. But again, the bulls have enough time this year to show the bears that they have what it takes to turn the market around.
Tesla’s Losses On Bitcoin Rises
At bitcoin’s current price, tesla might be forced to acknowledge a loss on its bitcoin holdings unless the virtual asset rallies before this month’s end. That would raise doubts about the primary source of tesla’s revenue (car sales or emission credits).
This price decline is an issue for the electric car giants since financial regulators consider bitcoin as a collectible, and any investment in the currency is held at a cost. Profits are only declared when companies sell their bitcoins, but holding companies must acknowledge it as a loss when the asset falls short of its carrying value.
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