The price of Bitcoin has given us a new surprise, it has started this week with a significant fall.
The price of BTC has fallen this Monday to values that we have not seen for 18 months. Source: edited image, original from pixabay.com.
And is that after trading near $30000 for several days, we saw that on June 12 it made a break of the support line that had held around $28000 since last month, and then experienced a rapid decline to reach a low at $20854 this June 14, as we can see in the daily price chart for the pair BTC/USDT, a price zone that did not reach since December 2020.
Screenshot taken from Tradingview.com.
This price had a quick rejection, which we can observe in a 1 hour time frame chart, as we observe the price bounce, however the price only managed to bounce up to near $23000, finding a resistance in this zone.
Screenshot taken from Tradingview.com.
has it hit bottom?
If we look again at the 4H chart we can see that the price has broken out of that descending line after marking the low, however it encountered that resistance near $23000 and the RSI is still in the oversold zone, so it will have to clear these hurdles for us to assume a complete reversal.
Screenshot taken from Tradingview.com.
On the other hand, if it breaks above the $22900 level and subsequently falls back to this level, it would validate this price level as new support, which would contribute to think that the price has bottomed in this move. Something that is also striking we can observe in the weekly price chart, noticing that at this moment BTC has reached an oversold level even higher than the 2018 and 2020 lows, so the price would be approaching a local bottom.
Screenshot taken from Tradingview.com.
And if logic does not fail us, then, if it has bottomed out, we could see strong BTC growth going forward.
But is the worst over or is winter just beginning?
It is certainly very difficult to predict what will happen in the market, we know that cryptocurrencies are very volatile, and depend a lot on people's perception, and BTC has lost just over 30% of its value in 7 days, which has serious effects on the whole market.
It seems that macroeconomic conditions are affecting the cryptocurrency sector too much, large investors seem to be looking for stability in other markets and are moving away from highly volatile assets, such as Bitcoin, and the withdrawal of liquidity lowers market prices. Although we have previously seen the Bitcoin rally after a big drop, this time new elements have been added to the equation, such as the policy currently being handled by the US Federal Reserve and the war in Ukraine.
Undoubtedly this has had a great impact on this sector, and we have seen some of the measures taken by important exchanges and lending platforms to face the current market conditions, I am not trying to add more pessimism, but to point out that we could go through another cryptowinter and the importance of designing a diversified portfolio, taking advantage of the opportunities that are presenting themselves without putting ourselves at risk, and never make panic decisions, we must hold firm in times like this while we wait for the recovery of prices.
Well friends, let me know what you think, do you think the worst is over or is yet to come? See you next time!
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Hi @emiliomoron
I don't want to sound fatalistic or anything like that, but over time I have learned that price action executes parabolic movements from the accumulation zone to culminate the distribution zone, therefore, we may not have hit bottom yet, remember that the Bitcoin bull run started between $9K and $10K, at that or rather close to that zone the price may reach, although some analysts say it started at $20K if this is true we are already at that bottom.
Best regards, be well.
Hi my friend, certainly we can find several opinions among analysts, let's hope we are already at that bottom and not fall to the 10k zone as others predict.