Bitcoin has fallen below the key support level of $29,100, causing concerns that volatility may increase soon. The overall cryptocurrency market has also declined, with total market capitalization dropping 1.5% in 24 hours to around $1.18 trillion.
This downturn has coincided with over $140 million worth of long trades being liquidated in the past day. The market moves seem to be driven by famed investor Michael Burry taking a substantial $1.6 billion short position in the stock market recently.
Burry’s pessimistic bet has stoked fears about the broader financial markets and triggered the sell-off in cryptocurrencies. With Bitcoin breaching a major support, traders are bracing for the potential of increased price swings and further declines across the crypto sector in the near term.
Experts are providing insights on the potential direction of Bitcoin’s price based on technical analysis. Renowned trader Peter Brandt has noted that Bitcoin’s price has been consolidating between $29,000 and $31,000 in recent months. Brandt warns that if the price breaks below the overall upward trend for the year, it would give an advantage to the bears (those betting on a decline).
The breach of the larger upward trend by the daily candlestick chart supports this bearish view. However, Brandt mentions that a bullish reversal pattern known as a bear trap could indicate a positive turn, signaling his preference for a horizontal price movement. Overall, experts are cautious about further declines if support levels are broken, unless bullish signals emerge. The price chart and key levels continue to guide analysis of Bitcoin’s price trend.
Industry analyst Rekt Capital reinforces the concerns about Bitcoin’s price trend and highlights the importance of weekly and daily closing prices in determining Bitcoin’s path in the coming weeks. While noting the potential for decreases to $20,000, Rekt Capital points to the bearish implications of the double top pattern and descending divergence on the weekly Relative Strength Index (RSI) chart.
Bitcoin recently dropping below a key support level has brought about negative sentiment across the cryptocurrency market. The insights from experts like Peter Brandt and Rekt Capital emphasize the need to be cautious given the potential for volatility and price swings in the weeks ahead. As investors and traders navigate these challenges, closely monitoring the shifting market dynamics will be advisable. Overall, analysts are wary about further declines unless bullish reversal signs emerge, with Bitcoin’s weekly and daily price closes being pivotal to watch.
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