- Bitcoin broke out of the price range between $9,500 and $10,000 and briefly fell below the psychologically important $9,000 mark.
- Analysts are currently discussing whether another correction to $8,000 could follow as the bulls appear to be running out of steam.
After Bitcoin failed at the $10,000 mark in its fifth attempt, another correction followed yesterday, with BTC falling briefly to $8,800. At the time of writing, the Bitcoin price has recovered to $9,050, down 4.88% in the last 24 hours. The market capitalisation has fallen from $174 billion to $166 billion.
The anonymous crypto-trader Crypto Iso describes that the pressure to sell Bitcoin could increase further, as Bitcoin has not managed to break through the $10,000 mark. In his opinion, the “buy the dip season” is finally over, as the technical fundamentals are getting weaker and weaker. As a result, he sees “scalping”, a trading style that aims to profit from small price changes, as a good technique to continue making profits during a downtrend.
Sell pressure is back in full force.
Buy the dip season is over.
Swing shorts and scalping from here on out.
— CryptoISO (@crypto_iso) May 21, 2020
For the first time in a month, Bitcoin is threatening to lose its middle Bollinger Band support. Big Chonis already pointed this out yesterday and urged his followers to be cautious, as Bitcoin could start another correction if BTC falls heavily below this support zone.
— Big Chonis Trading😷 (@BigChonis) May 21, 2020
Bitcoin is also very close to another technical indicator, the 200-day moving average (EMA200). In the past, a breach above this level has marked a rebound, and a downward breach has triggered a sharp correction. So far, the EMA200 has been defended by the bulls, but the trader “Byzantine General” points out that Bitcoin will start a large correction if the EMA200 is breached downwards.
Quick tip for the superguppy on the 4H.
When $BTC dips below the net, it usually taps the 200EMA.
When the 200EMA gives out, it's over. pic.twitter.com/9hHF4fbLAx
— Byzantine General (@ByzGeneral) May 21, 2020
Bitcoin analyst “HornHairs” also believes that Bitcoin could enter a downward trend in the coming days and weeks, so he has sold some stocks. For him, it is important that Bitcoin closes above the $9,200 mark on the daily chart and does not breach the middle Bollinger Band and the EMA200.
Swept highs and broke MS on the daily close in the context of HTF resistance.
Looks rough, sold some spot. pic.twitter.com/AOBomGcSNF
— HornHairs 🌊 (@CryptoHornHairs) May 22, 2020
Could Bitcoin drop to $7,000?
Other analysts describe that many macro indicators of Bitcoin point to a further correction and therefore try to make short-term profits by “shorts”. The well-known hedge fund manager Mark Dow described already in April that Bitcoin is facing massive resistance in the range of $10,000 to $10,500 and the lack of support zones in the range of $7,700 to $9,000 increased the probability that Bitcoin will fall again to $7,000:
On the chart, Bitcoin faces massive overhead resistance. Based on this chart, this is a textbook opportunity for a short at the moment.
However, the Altcoin market continues to show a strong correlation with Bitcoin, and has also seen heavy losses in the last 24 hours. The Ethereum price is down 5.08% to $200.94 and is on the verge of losing the important support along the $200 mark. XRP shows a slight downtrend of 1.73% to a price of $0.19. Litecoin, Cardano and Tezos are also drawing a correction. You can check the prices of more than 5,000 cryptocurrencies in our price overview.