Bitcoin Price in Danger of Crashing

The largest cryptocurrency by market cap entered bearish territory last week. Can it see a fast recovery?

by Kyzmoff
31 May • 2 min
In Analysis

Bitcoin (BTC) dropped below a vital level of USD 7700 last week. As we warned back in April, Bitcoin was struggling to break out of a zone between two major moving average indicators. In May, we took a deeper analytic approach to Bitcoin, trying to find out what is holding Bitcoin back and where it is headed. Succumbing to bearish pressure, the Satoshi coin dived in negative territory after failing to break above the 200 daily moving average and falling down below the 50 daily moving average. 


BTCgraphMA

"BTC's last support on the 50 daily average is near USD 8000. If that level does not hold, we might better buckle up. A possible fall in the price could always be a buying opportunity," we warned on May 9, and indeed we have witnessed a hefty drop of over 20% since.

What is more worrying, though, is that BTC even broke the 50 weekly moving average at USD 7700 - the larger the average span the more vital the level is. After that, it saw a drop to almost USD 7000, which proved to be last resort of support for the cryptocurrency for now.

Now, it looks like the largest digital coin, whose price development affects the whole market, is rebounding a bit, but in order for a greater comeback to happen, BTC will have to break that - previously support, but now resistance level - of USD 7700, before taking on next resistance levels.

If that does not happen by the end of the week, Bitcoin will enter a zone called (by me) the Danger Zone - between the 50 weekly moving average and the 200 weekly moving average around USD 2000, which would mean a scary 70% drop to the next technical support for the cryptocurrency.

At the time of writing, Bitcoin is trading around USD 7550, very close to USD 7700, so this Doomsday scenario will remain just a scenario if Bitcoin manages to climb over the fence quickly.

(The views and opinions expressed by the contributor in this text should not be considered financial advice, neither treated as expression of Coins.Online’s view. Cryptocurrency trading and investing is risky and market participants are advised to always conduct a thorough research.)

 

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