Bitcoin price is getting battered as if there’s no tomorrow. Following a huge red weekly candle closure, the benchmark crypto was crushed through another support zone in a plunge down to $6,600. BTC is now in a very dangerous territory which could result in a drop all the way back to $5k – here’s how.
Bitcoin Price Back in $6k Zone
When things turn south in crypto markets it happens in the blink of an eye. As positions get liquidated en masse, the short-selling avalanche gathers pace and that is exactly what has been going on over the past week.
The weekend saw bitcoin price take a breather and hold around the $7,200 level for a while but the bears came out again in force on Monday morning as BTC dumped to a six month low just above $6,600 according to Tradingview.com.
The RSI on the hourly chart is massively oversold so there may be a slight recovery here, but further losses are looking likely.
The digital asset is getting hammered hard with a 7% loss on the day, 22% pounding since the same time last Monday, and a 52% demolition since its 2019 high five months ago.
The failure of the weekly candle to close above $7k has analysts rattled and predictions of a fall below $6k are now starting to look like a harsh reality. Trader and analyst Josh Rager has eyed a support level for a bounce in the low $6k region;
“Funding still positive, so not overly bearish at this point as $6300s would be an eventual target here, the only question is does it bounce back up to high $7ks before or after the next drop,”
https://twitter.com/Josh_Rager/status/1198755564672704514
This takes into consideration the long spell of consolidation bitcoin had at the $6,400 level last year. This year however there has been no such support or resistance in this range which could result in a plunge back below $6k pretty rapidly.
BTC Back At $5k?
A more worrisome scenario would be a return to $5k and this figure is significant because it is where the 200-week moving average lies. This technical indicator served as solid support throughout the 2018 crypto winter when bitcoin dropped to its low below $3,200.
If this pattern is to repeat bitcoin price may well fall back to that support at $5k and hold there before any moves into positive territory occur. This at the moment is the worst-case scenario for bitcoin prices, but we have been there before and came through it.
Will bitcoin price dump to $5k this year? Add your comments below.
Images via Shutterstock, BTC/USD charts via TradingView, Twitter: @JoshRager
