The beginning of May has seen a continuation of weakness in the crypto and equity markets and at the moment there is no indication of any short-term factors that could reverse the downtrend.
Equity markets are also in a downtrend and, according to researcher Clara Medalie, equity prices Actions of companies with exposure to Bitcoin has also taken a noticeable hit.
medalie said:
“Block, Tesla, Microstrategy and Coinbase are down 20-50%.”
Data from Cointelegraph Markets Pro and TradingView shows that an early morning attempt by Bitcoin (BTC) bulls to rally above $39,000 was easily defended by bears, triggering a pullback to the $39,000 level. $38,200.
Below is what various analysts are saying about the current price action and the lower levels to watch out for in the event of a further decline.
Further downside until the 200 EMA becomes support
According to independent market analyst Rekt Capital, look out a close above the 200-day exponential moving average is an easy way to gauge Bitcoin’s current weakness. The analyst described the metric as an “indicator of long-term investor sentiment towards Bitcoin.”
Rekt Capital said,
“Since mid-2021, BTC has not been able to hold above the 200 day black EMA for too long. Every time BTC broke above the EMA, it quickly lost it as support and pulled back lower.”
The $28,000 could be the macro fund
The vision of what could come next for BTC price was touched on by crypto trader and pseudonymous Twitter user ‘Cantering Clark’, who posted the chart below highlighting the similarities between the current price action and the price action of BTC in July 2021.
Cantering Clark said,
“Similar pattern of heavy selling followed by weak attempts to break out to the upside as we saw in July 2021, again after a long-term sideways range formed and lows started to be favoured. Possible trap setup.”
Veteran trader Peter Brandt also shared a similar sentiment, noting that Bitcoin price could break to new lows if the current “bearish channel” plays out.
Brandt said:
“The completion of a bear channel typically results in a decline equal to the width of the channel, or in this case a hard test of $32,000 or so – my guess is $28,000.”
Long-term accumulation continues
Despite the current downward trend, data from glassnode suggests that BTC accumulation continues to rise, a fact highlighted by the Twitter account @negentropic.
Analysts said:
“Panic short-term holders took losses while long-term holders’ net change in position rose.”
The global cryptocurrency market capitalization now stands at $1.72 trillion and the dominance rate for Bitcoin is 42.5%.
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