In the past 24 hours, Bitcoin’s price has suffered its biggest single-day drop in its short history, falling from $ 58,000 to $ 48,000. What will BTC do next?
The BTC price is now correcting losses, but is facing strong resistance near $ 50,000 and is currently trading for around $ 48,000 on major exchanges.
After his recovery, Paolo Ardoino, Bitfinex’s CTO told Blockchain.News that this type of volatility is not new to Bitcoin and believes that while the sharp drop may “further galvanize Bitcoin critics”, who continue to reject the cryptocurrency as an economic spectacle, he believes that these critics are missing the point completely.
“For many of the battle-tested exchanges that have resisted market fluctuations, volatility is not new and is expected in such a young market. For many in the industry, development and deployment are priorities. Price movements are yet another secondary spectacle. “
Secondary or not, what can we expect from the price of Bitcoin in the short term?
On the daily candlestick chart of Bitcoin price, you can see that the BTC / USD currency formed a long pattern of red candles with the longest bottom shadow yesterday on February 22. The BTC price fell below the upside resistance line with the lowest price recorded at $ 47,400 – indicating that the BTC price failed to maintain its upward momentum and the bears managed to push the price down on the channel line with success.
The bottom long shadow occurred between 8 pm and 12 pm Hong Kong time, with sellers quickly lowering the price to approximately $ 47,400, but the bulls once again took charge and pushed the price back to around $ 49,000 minutes later. This phenomenon shows that, although bears want to sell Bitcoin and have aggressively blocked profits, the power of bulls cannot yet be underestimated and investors have seized the opportunity to buy Bitcoin at a low price.
In the past two days, the candlestick chart has closed below the 9-day moving average, while the moving average range indicates that investors are pessimistic in the BTC market in the short term.
At the time of writing, the BTC price is testing the midpoint of the upper body channel again. In our technical forecast, if the BTC price can stay firmly above $ 52,000 and recover effectively, it would indicate that the buyer’s momentum is sufficient to continue the bullish trend and that bulls are in control of the market. This would mean that Bitcoin’s first target would be to break the upward pressure line again, which currently stands at around $ 57,000, to reach $ 60,000.
On the contrary, if the price of Bitcoin falls below the midpoint of the channel, it will be the first sign of weakening buyer momentum and the price of BTC can test the support level of the upstream channel at around $ 47,000, which will be second major indicator of low purchasing power.
If the BTC falls below $ 47,000, Bitcoin may correct to hit the 50-day moving average and drop to $ 41,036 in the next few days.