Bitcoin (BTC) needs to hold current levels and work to reclaim higher highs to avoid a drop into the $20,000 range, a latest analysis warns.
Is the USD 20,000 coming?
Data from Cointelegraph Markets Pro and TradingView showed that the BTC/USD pair was still failing to consolidate the $30,000 level as support at the open on Wall Street on May 16.
The pair had suffered further losses after the weekly close at $31,300, which in itself disappointed market participants after sealing a seventh consecutive weekly red candle.
Even as the Luna Foundation Guard (LFG) revealed that it had sold almost all of its BTC holdings during last week’s LUNA and TerraUSD crash, the implied lack of future selling failed to lift sentiment in the markets.
“The next few days are going to be very important in my opinion. Hold these levels, move forward from here,” popular trader Phoenix summed up in a Twitter post that day.
“If it fails, my eyes are on $21,800-$23,800. Didn’t expect to have that in mind again lol. I was wrong to think that the Q1 structure was a start of trend reversal.”
Phoenix is not alone in forecasting a return to levels even below last week’s bottom just below $24,000.
Analyst Rekt Capital joined the consensus, noting that $20,000 is an area of interest if current levels fail to hold and buyers fail to materialize.
#BTC Monthly Timeframe
Price is at ~$28800 support
In 2021, $BTC formed long downside wicks against this support, indicating strong buy-side interest here
— Rekt Capital (@rektcapital) May 16, 2022
#BTC Monthly Time Frame
The price is at the support of ~$28,800
In 2021, $BTC formed long bearish wicks against this support, indicating strong buying interest here
Let’s see if the buyers show up soon because the next major monthly support below is at ~$20,000 (orange)
Last week’s action addedcould have already created a new trading range for Bitcoin with its macro range low at $28,800 figuring as its top.
“If this turns out to be the case, the Macro Range Low could become resistance to reject price back to lower levels”he explained.
Meanwhile, some remained cautiously optimistic about the near-term outlook, including Cointelegraph contributor Michaël van de Poppe.
“The crucial upside breakout is $30,200. A continuation towards $32,800 is generally expected for Bitcoin.”
At the time of writing, the BTC/USD pair was trading around $29,300 on Bitstamp.
Bitcoin “synonymous with volatility”
On a macroeconomic level, the picture remained much the same as in recent weeks: stocks under pressure amid a continued rise in US dollar strength.
The US Dollar Index (DXY) hit 105 on May 13, and on May 16 it was attempting to retest that level, which was rejected at the time.
The S&P 500 was down 0.65% on the day, while the Nasdaq 100 lost 1.3%.
Twitter stock was in the news again, this time underperforming tech stocks, trading lower than it was before Elon Musk announced his 9% stake and takeover offer.
For Bloomberg Intelligence chief commodity strategist Mike McGlone, comparisons had to be made with the dot-com bubble.
#Cryptos vs. #StockMarket: $1 Trillion Wipeout vs. $20T – Crypto assets were top performers in the past decade, and the trend is accelerating in the 2020s. The internet bubble that burst in 2000 was a reminder that nascent technologies/assets are synonymous with volatility pic.twitter.com/Jwxt6Yr8iG
— Mike McGlone (@mikemcglone11) May 16, 2022
Cryptocurrencies vs. Stocks: $1 Trillion Vanishing vs. $20 Trillion – Crypto assets were the most profitable of the last decade, and the trend is accelerating in the 2020s. The internet bubble that burst in 2000 it was a reminder that nascent technologies/assets are synonymous with volatility
“If risky assets continue to decline, one of the best performers in history -Bitcoin- should face a proper mean reversion, but early days of adoption may favor the nascent technology/asset,” wrote in another tweet that day.
“Both Bitcoin and the S&P 500 have dipped below their 100-week moving averages.”
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