The value of the main cryptocurrency has fallen below the psychological mark for the first time since December 4th of last year. According to on-chain metrics services, the decline in the price of Bitcoin on cryptocurrency exchanges triggered the liquidation of buyer positions for more than 25 million dollars in just 2 hours.
This decline confirms the significance of the three black crows pattern (indicated by the arrow) and the principle of “buy the rumour, sell the fact” – as we discussed in the Bitcoin price analysis on January 15th.
What’s next? Will the price continue to decrease?
JPM head Jamie Dimon, as well as legendary investor Peter Schiff, are pessimistic. In their opinion, Bitcoin is a speculative asset. Jamie Dimon explicitly advises staying away from bitcoins, while Peter Schiff, comparing Bitcoin to gold, prefers the precious metal.
On the other hand, the current decrease may indicate a correction within an upward trend. This perspective is held by financial expert and publicist Anthony Scaramucci.
Today’s Bitcoin chart shows that:
→ BTC/USD has dropped not only below the psychological mark but also below the lower boundaries A and B of the channels, shown in blue and purple on the chart.
→ The RSI indicator points to oversold conditions.
If the market shows signs of recovery, then:
→ the nature of this recovery (comparing the speed, volumes, and progress achieved relative to the decline from the peaks on January 11th) will provide important information to determine the strength or weakness of demand in the market;
→ the important psychological level at 40,000 will be considered support, an attempt to break which has failed. So far, bears are aiming to establish themselves below $40k. If they succeed, the psychological level may pose resistance in the future.
As long as the price of Bitcoin is below 44,000 (approximately 50% from the January peak), we may consider that the initiative is on the bears’ side.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
