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Cryptocurrency Market Continues to Fall as Bitcoin Price Seeks Support at $6,700

Last Updated March 4, 2021 5:08 PM
Joseph Young
Last Updated March 4, 2021 5:08 PM

On previous reports, CCN.com emphasized that the price of bitcoin will likely fall to the higher end of the $6,000 region in the short-term. Over the past 24 hours, the bitcoin price has dropped by 2.5 percent, from $7,580 to $7,350, dipping below the $7,300 mark at one point.

Lack of Momentum

Throughout 2018, the bitcoin price has experienced three major corrections on February 7, April 10, and May 25. The initial correction that occurred on February 7 led the bitcoin price to drop from $19,900 to $6,100, by more than 69 percent. The second correction on April 10 prompted BTC to fall from $12,000 to $6,400, by 46 percent. The third and latest correction on May 25 led BTC to decline from $10,000 to $7,200, by 28 percent.

A trend can be seen in the three major corrections BTC experienced in 2018, which is that every successive correction had smaller sell-offs and narrower correction periods. The initial correction in February lasted nearly two months, while the second and third corrections bottomed out in about a month.

Following the five-month price trend of bitcoin, it is highly likely that BTC rebounds from the $6,800 mark in the short-term, initiating a strong rally in the mid to long-term. After BTC bottoms out at $6,800, the market is expected to experience an accumulation period, leading the value of BTC to increase gradually and secure momentum. Following a continuous accumulation period could be a parabolic rally, driving the value of most cryptocurrencies to grow exponentially.

Despite the optimistic long-term outlook of BTC, it is important to acknowledge that both BTC and the rest of the market are in a bear cycle and the bear market will likely continue until BTC bottoms out at the higher end of the $6,000 region.

Analysts including Willy Woo have shared their vision of BTC falling to the $5,000 region but unless the BTC price falls below the $6,500 mark and fails to sustain the $6,800 support level, a fall below the $6,000 mark remains unlikely.

Altcoins and Tokens

Trading alternative cryptocurrencies and tokens in a highly volatile period and a bear cycle is similar to leverage trading. Because tokens tend to experience intensified movements on both the upside and downside, it will follow the price trend of bitcoin but with larger price movements.

Most of the tokens that have performed exceptionally well against major cryptocurrencies like bitcoin and Ethereum throughout 2018 have not been able to avoid the bear cycle. 0x, ICON, Zcash, and WanChain, which have demonstrated significant improvements and major developments in regards to scalability, long-term strategy, and technology, have seen a substantial decline over the past month.

One evident trend is the lack of investors and traders willing to sell BTC and other cryptocurrencies at current levels. As such, although technical analysis points elsewhere, a fall below the $6,000 mark for bitcoin in the short-term is unlikely and the valuation of the cryptocurrency market is not expected to fall below the $300 billion region.

Featured image from Shutterstock.