Following a week of slow but steady gains Bitcoin fell off the digital cliff again yesterday with a flash crash that wiped out all progress made so far this year. Analysts are now looking at a short term correction if BTC can hold on to where it has currently fallen.
Further Downside Expected on Consolidation
In an epic dump that wiped out $8 billion in 60 minutes crypto markets are back near $120 billion market capitalization again. Bitcoin led the fall when it failed to break resistance at $4,050 twice yesterday. The first plunge dumped BTC to $3,850, which it held for 8 hours before a second swift purge send it tumbling to $3,670. The net result was almost 10% lost in under 24 hours.
Prominent analyst Alex Krüger has highlighted $3,600 as a key level stating that consolidation below this price would likely lead to further downsides.
Bitcoin is currently at its lowest level for the week as it plunged through previous support at $3,850. It has not been below $3,600 since the mid-December dump which saw all cryptos reach their lowest levels for well over a year.
Bitcoin fell to just below $3,200 on December 15 but managed to recover over 30% in the following ten days to reach a high of $4,200 during the ‘Santa rally’ on Christmas eve. Since then it has consolidated between $3,650 and just over $4,000.
At the moment Bitcoin is still holding within this range bound channel which is why $3,600 is a key level of support. A break through that could see things back at the 2018 low again very quickly. If Alex gets his wish and Bitcoin ends the day above $3,700 it could retest $4,000 again in the coming days.
Other prominent analysts have predicted further losses as Bitcoin faces a huge wall of resistance at $4,000. Using a plethora of different technical indicators Murad Mahmudov, who has predicted things pretty accurately in the past, said that Bitcoin is facing a very tough task breaking above $4k and that has been clearly evident with yesterday’s dump.
On the more positive side of things CEO of DoubleLine management, Jeffrey Gundlach, told CNBC that Bitcoin reaching $5,000 would be an ‘easy 25%’. He and others have noted that Bitcoin is currently trading in a $3k to $5k range though it hasn’t been anywhere near $5,000 since it plunged through it so quickly on November 19.
The crypto winter is far from over and Bitcoin is still the bellwether for things to come.
Author: Temitayo Olojede , firstname.lastname@example.org