Within a period of 12 hours, the price of Bitcoin (BTC) has dropped from $5,560 to $5,170, to a new yearly low.
After dropping to $5,750 on June 11, BTC has defended the $6,000 support level relatively well with sufficient volume and trading activity in the exchange market. $6,000 has since become a major resistance level for the dominant cryptocurrencies.
Last week, Crypto Rand, a well-recognized cryptocurrency trader and analyst, stated that the next likely range for BTC is between $4,800 to $5,200, especially if BTC fails to recover swiftly from the low $5,000 region to the $6,000 resistance level.
“More Scenario still active. No bottom signals. Target on the $4,800-$5,000 range,” Rand reaffirmed his stance on the short-term trend of BTC, explaining that technical indicators of BTC are not demonstrating any sign of a bottom.
Based on the current conditions of the market, a further drop below the $5,000 mark is highly likely. When a sell-off at this magnitude occurs across every other major cryptocurrency, the volume of BTC tends to spike by 70 to 100 percent.
On November 15, when the price of BTC dropped below the $6,000 for the first time since early August, the volume of BTC surged from $4 billion to $8 billion.
However, as of November 19, the volume of BTC remains at just above $4.8 billion, suggesting that sell-pressure on the asset is still relatively high and the resistance from bulls in the market remains low.
For a brief 48-hour period last week, major cryptocurrencies and small market cap tokens engaged in independent price movements, unaffected by the short-term trend of the dominant cryptocurrency.
As BTC continues to fall to the low region of $5,000 and becomes vulnerable towards an entrance into the high $4,000 region, other major cryptocurrencies and tokens are expected to fall by substantial margins.
Within a seven-day span, the price of BTC has dropped from around $6,400 to $5,170. Based on the intensity and the magnitude of the drop, a drop below the $5,000 mark is likely, especially considering that technical indicators are showing no signs of a bottom.
Willy Woo, a Bitcoin researcher and the founder of Woobull.com, said that fundamental indicators of the Bitcoin blockchain show a high probability of the negative sentiment around BTC and the rest of the crypto exchange market extending until the second quarter of 2019.
“This last reading of our blockchain and macro market indicators is still in play. What has changed is that NVTS has now broken its support, typically a sell signal. All our blockchain indicators remain bearish. NVT, NVTS, MVRV, BNM, NVM. They are experimental but have served to make very correct calls to date, even when traditional on-exchange indicators were reading to the contrary.”
If BTC drops below $5,000, the probability of the negative sentiment around crypto extending until the first half of 2019 could become inevitable.
Featured Image from Shutterstock. Charts from TradingView.
Last modified: May 20, 2020 2:22 PM UTC