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The crypto markets saw no reprieve Tuesday, with Bitcoin exhibiting only minor indications of recovery. The biggest cryptocurrency is presently trading at $19,700 and is showing minor signs of recovery. Will it hold up?
Other big cryptocurrencies have failed to reclaim ground lost in Monday’s sell-off, with Ethereum falling another 2% since this time yesterday. The value of the second-largest cryptocurrency is presently below the unprecedented $1k levels at $970. Following the previous day’s pounding, stocks were calmer, with the S& P 500, Dow Jones Industrial Average, and NASDAQ all nearly flat.
Investors were looking forward to US Federal Reserve’s next interest rate hike on Friday. Goldman Sachs (GS) economists predicted 75 basis point rate increases in June and July, that’s what the Federal Reserve has done. Crypto watchers are wondering if the recent hike will finally introduce stability to the crypto market.
What If It Falls Below $16k?
Recent price movement hasn’t shown anything concerning a likely short-term turnaround. However, a larger picture suggests a framework that may provide hope to the market. Some investors may be thinking if now is the time to buy Bitcoin.
Your capital is at risk.
However, experts have said otherwise. The FOMO created in the current ecosystem can lead to more desperate scenarios. Furthermore, long-time crypto watchers are saying that the price drop isn’t happening because of the selling pressure generated from multiple sellers, but from multiple corporate ones. They have turned to liquidation to repay the debts as quickly as possible.
Some Technical Analysis
Bitcoin reached a high of $69,000 in November 2021. The price has lost 70% of its worth since then. Although Bitcoin has not fallen below $20,000, the chart implies that solid support is located around $19,500. As a result, Bitcoin will return to its prior all-time high (ATH) reached in December 2017.
After a huge bull run, the crypto market has proven that prices frequently return to past ATHs. That appears to be Bitcoin’s path. But what happens if Bitcoin hits that level of support?
The good news for the market is that Bitcoin has not had a significant pullback after the price fell from the ATH. Retracements are common after huge market movements, and Bitcoin is due for one.
If support remains $19,500, a reversal can be possible. According to Fibonacci retracements, Bitcoin normally retraces to the .702 level. If that occurs, and we take the ATH and immediate support as lows, we expect Bitcoin to retrace to approximately $55,000.
That said, the current market crash is further aggravated by inflation. Experts say they can’t purely rely on past parameters to predict movements. Thus, they’re now considering all the fiat assets into account to predict what happens to the token in the future.
However, if the retracement occurs, Bitcoin will encounter resistance at .702 and may extend to .786, implying that Bitcoin’s price will challenge resistance at $59,000. The market will eventually turn positive, and investors will look for the top crypto exchanges to trade in cryptocurrency.
But that scenario doesn’t exist in present. The coin had ventured below the $19k levels. Experts are saying that the current price is nowhere near the bottom. Therefore, the next days are going to be extremely crucial for the world’s first crypto asset.
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