Bitcoin Support Fails. Here Are 2 Things To Watch Out for.
2022.05.06 12:15
Bitcoin Support Fails. Here Are 2 Things To Watch Out for.
- Bitcoin could have a bearish weekly close leading to 6 consecutive red candlesticks.
- Bulls need to retake the $37,000 position; otherwise, price could fall until $32,000.
- Market can expect a bounce should Bitcoin hit $32,000.
Bitcoin made an overnight crash that caused many to liquidate their positions. After a two-day attempt to return to the $40,000 mark, the bears have proven that they have the upper hand, forcing the chief cryptocurrency into submission until $35,500.
At the time of writing, Bitcoin price is at $36,487.44, as per CoinGecko. However, the entire crypto space is all-eyes on what will become Bitcoin’s fate in the next couple of weeks. Here are a couple of scenarios that could happen.
Bitcoin Price Analysis: Lower Highs and Lower Lows
Bitcoin has been in a downtrend for quite some time after failing to manifest the hyper-bullish $100,000 scenario as predicted by many crypto bulls. So far, the market has identified two strong psychological resistance levels: $50,000 and $45,000.
For Bitcoin to hope to reach these levels, it has to retake the support positions that the bulls have surrendered to the bears.
BTC/USDT 1-day chart (source: TradingView)
As seen on the chart above, Bitcoin has experienced at least three price crashes since the start of 2022. The worst was back in January, when Bitcoin hit $32,000. However, this event showed that this is a very strong base for Bitcoin, and this is one of the key areas that traders and investors need to watch out for.
Should Bitcoin fail to recover from its current price, the bears will have to meet huge resistance from the bulls at the $32,000 mark. Readers should also note that Bitcoin is in its accumulation phase, which takes a lot of time to complete. In other words, Bitcoin is undergoing a normal phase, and that it can crash a couple of times during this period.
However, there is a high possibility that Bitcoin will recover. The trading volume from yesterday (May 5) has shown that many traders have liquidated their long positions. The Relative Strength Index (RSI) at 38 also shows that Bitcoin is close to becoming oversold. Traders will become interested in making an entry especially if the price falls again to $35,000.
The only way to confirm that Bitcoin will recover is if it flips the $37,000 resistance into support. This is also another crucial price level that traders should watch out for.
BTC Price Weekly Analysis: 6 Consecutive Bearish Weeks
The weekly chart also does not show a very healthy sign for Bitcoin bulls.
BTC/USDT 1-week chart (source: TradingView)
If the week closes with this current market sentiment, it would mean that Bitcoin will finish on another red candle. This has been the case for five consecutive weeks already. Furthermore, Bitcoin’s price is still below the crucial support level of $37,000.
Bitcoin bulls need to retake the $37,000 level before the week closes. Otherwise, traders would need to watch closely if it falls further until $33,000. If this happens, the market could hope for a bounce-back into $35,000 again.
In summary, the two things to watch out for are (1) if Bitcoin retakes the $37,000 territory and (2) if Bitcoin falls to $32,000.
Disclaimer: The views and opinions expressed in this article are solely the author’s and do not necessarily reflect the views of CoinQuora. No information in this article should be interpreted as investment advice. CoinQuora encourages all users to do their own research before investing in cryptocurrencies.
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