Bitcoin has broken down from the $50,000 psychological support level making new low in 48 days.
At around 17:00 UTC on Thursday, bitcoin’s (BTC, -7.3%)‘s price fell from around $54,900 to $51,500 before the markets initiated another sell-off to $48,300, according to Bitstamp exchange data. Other cryptocurrencies are also experiencing sharp sells, The Global Market Cap is down by 9.66% in the last 24 hours.
Stock Market also witnessed a sharp drop after News circulated that federal tax rates for rich investors could be as high as 43.4%.
Bearish News Cycle has been Started
The News, and media releases have always played a key role in building bullish or bearish trends around bitcoin or any other cryptocurrencies. We have been receiving positive news about bitcoin adoption, regulation, and corporation buying for a long time, and that was helping bitcoin’s price to grow. But Something has been changed since last week.
We’ve officially entered into a Bearish News Cycle.
In Last few days alone, we’ve seen five major bearish news which impacted bitcoin in negative way.
|Turkey bans crypto payments citing risks
|Coinbase insiders dump nearly $5 billion on listing
|Half of Bitcoin Network went down due to Blackout
|U.S. Treasury may take action against money laundering that’s carried out using digital assets
|Biden could propose capital gain as high to 43.5% for wealthy investors
Bitcoin Technical Analysis
Bitcoin retested 100MA Daily support after 200 days. The price has bounced from this support level, and now trading above $50,000. Bitcoin should hold 100MA Support to remain in a short-term bull market. As it’s a key line of defense for bitcoin which can avoid further crashes.
There is also a major bearish sign developing on the Daily chart, which we can not ignore. We can spot an upcoming Death Cross between 21MA, and 50MA. Bitcoin needs to bounce back from the current level and regain 21,50MA support again to avoid any upcoming bearish market structure.
As of now, The Price action looks bearish on daily timeframe. Have a keen watch on News cycle, It can change as well.
We have a big warning sign on the weekly chart: A Bearish MACD Crossover is spotted after 52 weeks. We can expect the price to drop at least 20% from the current level if this plays out. The current week is not closed yet, so bitcoin needs to bounce hard from the current level to avoid this bearish crossover.
We have outlined bearish signs on charts, keep them in mind when you trade bitcoin, and other cryptocurrencies. We have a strong probability based on both technicals and news cycle that bitcoin’s price can drop to $40,000 in near future.
Hitesh Malviya is the Founder of ItsBlockchain. He is one of the most early adopters of blockchain & cryptocurrency enthusiast in India. After being into space for a few years, he started IBC in 2016 to help other early adopters learn about the technology.
Before IBC, Hitesh has founded 4 companies in the cyber security & IT space.
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